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Programmed for growth

To be faced with a complete restructure of your company and to have your entire ICT infrastructure taken away would be a severe test for any CIO -- more so as Allister Lowe did not know, when he became IT manager of transport and logistics company Toll Tranzlink in 2008, that the big change was only 12 months away.

No one else was aware at that stage that Toll would sell New Zealand's rail and ferry operations, which it then owned, back to the Crown.

"We sold literally everything," says Lowe. "Infrastructure, servers, licences, desktops, supplier agreements, telephony: everything went into Crown ownership; we owned nothing.

"For a 12-month period we operated on what is now KiwiRail's infrastructure. Under the deal that was struck, Toll had 12 months to physically separate ourselves and rebuild our own world. The first six months were spent on an RFP process, understanding what we had to do and then we had six months to reconstruct our world, forge new supplier relationships, procure hardware and roll out all of our new technology. That was a huge project that covered all aspects of ICT and we had to run old alongside new [technology] without impacting the business."

To add to the workload, Toll's strategy of growth by acquisition didn't stop. "We had acquisitions that we were integrating at the same time, and that made it a huge undertaking."

Still, Lowe saw the positive side of the challenge: "I was very fortunate when we sold the rail and ferry operations, that I gained responsibility for Toll NZ as a whole and had the opportunity to rebuild everything from scratch. It's not often you get that opportunity," he says.

"From my perspective a lot of the infrastructure there was aging and unreliable and in desperate need of a refresh, and there was lots of room for the IT services provided at the time across the business units to be improved."

Toll NZ opted for an outsourced solution, choosing TelstraClear as its main provider.

"Traditionally ICT was in-sourced" and the New Zealand operation ICT team had a staff of 55 when Lowe joined. "I didn't want to replicate another team of that many people," he says. In the New Zealand context it made "total sense" to get the efficiencies and benefit of outsourcing.

For Toll globally, it was a great opportunity to test a different model and the company now has the option to launch similar models around the world where it makes sense, he says. At present, Toll remains unique. "In many respects Toll leads the way in terms of VoIP and virtual desktop infrastructure," says Lowe.

"We use SunRay desktops, hooked into VMware virtual server infrastructure and our CommVault backup infrastructure. We also run NetApp as our storage, which the virtual desktops hook into.

"With any outsource model you want to minimise your cost and an obvious way of doing that is to adopt a centralised virtualised infrastructure," Lowe says. "It's more efficient, we've got sites nationwide in 55 locations. The more infrastructure and technology you put on site, the higher your support costs are. With a virtualised infrastructure and desktop model, our site-support requirement for infrastructure is very low. The only infrastructure on each site is a switch and a router. Everything else is managed to run centrally."

Outsourcing may not be the preferred model for the long-term, he acknowledges. "If at any time the in-house offerings of Toll global are able to offer what we have today, we'd look at that. Right now there are a lot of changes in global ICT, so the gap will close and at that time we'll re-evaluate where we are."

Today, a team of seven, including Lowe look after Toll NZ's IT services across all the sites and seven businesses. They look after all applications and software as well. "We can do that because we have outsource partners."

That means the core capabilities within the in-house team are focused on business analysis and project management. "I have an infrastructure operations manager who works very closely on the site with a TelstraClear service delivery manager and a TelstraClear onsite support person, who works at our site. Toll also has a dedicated TelstraClear account director. So we have a very strong strategic relationship at all levels with TelstraClear.

Applications are, of course, chiefly concerned with the movement of freight. "All our owner-drivers use hand scanner technology -- Intermec CN3 devices -- to send and receive information. They operate on the Vodafone GPRS network. We also use the devices to track where our drivers are; we use that real-time information in quite an innovative way with parcel ticketing solutions."

Customer focus

When he joined, Toll in NZ didn't operate a parcels service. "Historically, Toll has tended to move larger palletised freight, but we wanted to launch a parcel product to complement the general freight business, as many of our freight customers also had parcels. We identified that we needed some point of differentiation in the market as a new entrant in this sector. All our competitors run a prepaid ticketing model. Customers buy books of tickets -- different colours depending on [destination] and weight of the parcel. Customers have to pick their green book for Auckland to Wellington; then pick a ticket appropriate to five kilograms and decide whether they want signature or non-signature [delivery]. "While it works well, it's not very customer friendly with all the different books; and customers have to pay for the books in advance, so it's effectively money on the warehouse floor that is open to abuse," says Lowe.

"Toll didn't have any historical baggage, so we looked to create something more innovative and customer-friendly; to use technology to solve the problem.

"The solution Toll came up with was 'one ticket, anywhere any weight' using the GPS capability on our scanners. It's a very good demonstration of technology innovation to solve a business problem and it's been very well received by our customers, because it's very easy to use and quite different from the way other companies operate. An added benefit for customers is they don't have to pay in advance for their tickets."

Toll NZ has just finished another project, run jointly with Vodafone/Datacom and specialist software developer VisFleet. Toll NZ has equipped its FCL (full container load) owner-driver fleet with Samsung Galaxy smartphones running VisFleet's vWork, a cloud-based visualisation scheduling system. "FCL job requests are sent to the visualisation system from Toll's Freight System. Jobs are assigned to the trucks by drop-and-drag and dispatch directly to a Samsung Galaxy smartphone. We have full visibility of the movement of the containers and the trucks up and down the country.

"That just went live a couple of weeks ago. It's been very successful, and that opens up other opportunities for Toll to use smart phones to our benefit; they'll never replace the traditional scanner, but I wonder when the likes of Motorola and Intermec will start to run Android rather than Windows Mobile."

Lowe began his career in the business rather than the ICT side -- with American Express in the UK, where he was born -- and he sees that as an asset. "I have a business appreciation of IT rather than a technical focus. My focus is making sure the people in the business understand IT and making sure IT portrays [what they're doing] to the business in a business way. Building strong relationships is key."

Toll's IT team rotates its members through an "IT hot desk" within the business. Supplier-funded barbecues and twice-weekly martial-arts classes are initiatives Lowe has introduced for ICT, general staff and suppliers to get together. "It's a great way of building relationships and helps with teamwork," he says.

Driving the business forward

After working in various departments within American Express in the UK, Lowe took on a user-acceptance testing exercise, which interested him in ICT. He subsequently spent 10 years at American Express in various ICT roles. On moving to New Zealand in 1998 he took on a project manager/second in command role with a courier business. "The freight industry is very different from the finance industry, where I'd come from. Being an American company and in the finance industry, [Amex] was very structured; lots of methodology and process and procedure. The freight industry can be quite the reverse; everything needs to happen tomorrow," he says. After 11 years in the courier sector, he moved to Toll.

As Toll NZ group IT manager he is part of the senior management team, a recognition of the importance of ICT. "The general managers of each business unit sit on the management team alongside me as do human resources and finance and we all report to the group general manager of Toll NZ Greg Miller."

Acquisition continues to be an important strategy for Toll, crucially affecting ICT. "You never know which [acquisition proposals] are going to land, and typically when they do land, we need to effect them quickly."

Immediately [after] the deal is struck, the consequences become top priority with the ICT team. "Depending on the nature of the acquisition, that can vary from a full-blown ICT project, with applications integration, to just infrastructure. They're always bubbling away and part of our strategy," says Lowe.

The other major priority is "the evolution of the foundation laid with TelstraClear", he says. "We're two years into a five-year contract and always looking at how we can improve what we've done and use the new technologies that are out there."

Infrastructure as a service is a major avenue of exploration with TelstraClear, potentially enabling Toll to use only the capacity it needs when the need arises and reduce depreciation cost on fixed assets.

"That opens up other opportunities; there could be desktop as a service, voice as a service, and others. Those are discussions I've been having with CIOs within Telstra," a move whereby Toll could contribute to productive evolution of TelstraClear's ICT business.

"Because of our strategic relationship, it makes sense for us to work together. They're keen for that kind of model; we're keen to look at it; so it would make sense for us to partner up."


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