- John Bell CA used his deep experience as a CA and technology and management consultant to streamline Fletcher Building’s technological suite.
- Instead of outsourcing the huge project, he convinced his boss and the board to “transform from within”.
- The customer satisfaction rating for using Fletcher Building’s technology has risen from -2% in 2015 to 33% today, and is accelerating fast.
John Bell CA retired from his position as chief information officer (CIO) at iconic New Zealand company Fletcher Building in September 2019, almost four years to the day that he started in the role. The scale and scope of the technology transformation he oversaw in that period is remarkable.
Before packing up his desk, Bell made time to speak to Acuity to share some of the key lessons he learnt through the process.
When Bell was first appointed as Fletcher Building’s CIO in 2015, he had a remit to oversee the outsourcing of a major technology transformation. The business was well down the track of talking to two technology vendors about a massive project designed to catapult the company into 21st-century, digitally enabled efficiency.
Fletcher Building employs more than 20,000 people globally across 34 business units. Australasia’s largest building materials supplier, its brands include Laminex, Fletcher Insulation, plumbing supplies retailer Tradelink, Dimond roofing and Easysteel.
When Bell joined the company it had 21 information technology teams, 39 intranet and email systems, and a raft of legacy platforms that were decades old and hadn’t been upgraded in years. The business operated 25,000 devices and supported 200 different types of personal computers. There were 19 individual service desks, 20 data centres, 2500 servers and 40 standard operating environments (SOE). The various IT teams were supporting 15 remote access methods, 160 websites and 19 payroll systems. And all of this was spread over 900 sites in 40 countries.
It was, says Bell with impeccable understatement, an “inefficient and also a very complex environment”.
“We didn’t really know how many people were employed. We didn’t know the true state of our application environment, and our group technology was dispersed and fragmented and, quite honestly, it was creaky.”
Historically, all IT decisions had been handled at the business unit level (in part a reflection of the group’s growth via multiple acquisitions). A decision had already been taken in 2014 to implement a group technology strategy to streamline operations and consolidate costs. But the implementation of the plan was, understandably, proving very difficult.
The plan was to consolidate the technology silos to reduce the number of platforms and complexity for the group. That would drive a transformation across all business units, creating a digital capability that would change the way the company functioned internally, and also how it engaged with customers.
But the more Bell and his team looked into outsourcing, the more they understood the true costs and the risks.
“There was initially an assumption that the problems would be solved by outsourcing, but I believe in the saying that ‘you shouldn’t outsource a mess’,” he says.
“There was initially an assumption that the problems would be solved by outsourcing, but I believe in the saying that ‘you shouldn’t outsource a mess’.”
“With outsourcing, you can pay an awful lot more to get things fixed by people who don’t really know and understand your business, and you pay a massive premium for them to have that learning experience.”
What are the benefits of transforming from within?
Picture: John Bell CA.
So Bell went back to the executive and the board with a revised plan to “transform from within”. Fletcher Building’s then chief executive, Mark Adamson, bought into the strategy and took it to the board, which signed off on the updated plan to leverage Bell’s deep experience as both a CA and technology and management consultant.
Before joining Fletcher Building, Bell had spent more than 30 years with Deloitte, 21 of those as a partner specialising in advising companies on technology projects.
“I knew the company was in need of transformation,” Bell says. “Fletcher Building touches almost every community in New Zealand and as a passionate Kiwi I felt the skills I had were relevant.”
The transformation process commenced in July 2016, with three key objectives: to create a single centralised group technology unit, to rationalise the application and technology environment, and to begin the journey towards becoming a digitally enabled company.
“The business is now two-thirds into the transformation program and I genuinely believe it will achieve its targets,” says Bell.
Over the past four years, some NZ$220million has been spent on the project, which has delivered savings or avoided costs of NZ$65 million. It is delivering a ‘fit-for-purpose’ technology environment that is setting Fletcher Building up for the future and enabling its staff to work effectively.
Cost was not the only driver for the decision to bring the tech project in-house. There was a strong feeling that if it was done internally then the transformation would deliver greater business value, be a better fit with the business, and have more internal buy-in.
Bringing CA skills to the CIO role
Bell began his career as a consultant on information systems with Touche Ross in Whanganui, working with largely small and medium sized enterprises. He gained global experience with Deloitte in Canada, Australia and New Zealand.
Along the way, postgraduate study led to a qualification as a CA and the finance skills that proved invaluable in advising on technology projects.
“When you are trained as a chartered accountant, one of the things you get to grips with is the underlying process of how a business operates,” Bell says. “I’ve found that knowledge absolutely invaluable. I don’t know how I could have done my job without it.
“Whether it’s the employee life cycle, the procure to pay, order to cash or the asset life cycle – all these processes are fundamental to the business and our job is to apply technology to make them work effectively.”
Accountants, he says, also have the advantage of a strong framework of ethics and standards to guide their work and are familiar with good governance principles. These disciplines translate well to the tech world, where implementations require changes around culture, processes and people to make them successful.
“I’ve worked on floppy disks to mainframes and then the cloud and now on major transformations, and I’ve seen some big failures,” Bell says. “Where you see the big stuff-ups, in my experience, is in the world of projects – such as upgrading an enterprise resource planning system or putting in an e-commerce platform – and these projects are ones which will fundamentally change the business and therefore require a lot of attention.
“I would never go ahead unless that project is truly owned by the business, because if that is not the case you can guarantee that it will fail.”
How a tech transformation empowers people
Success comes when technology is an enabler for better business outcomes, rather than an end in itself.
“In the case of Fletcher Building, it was about transforming group technology to enable the business itself to transform,” explains Bell. “So it’s not about the technology but what it enables us to do. If it can give us a more efficient supply chain and distribution network using big data, robotics or Internet of Things (IoT) technology, then those are the outcomes we want and we focus on as the final deliverable.”
Under the group technology approach, the CIO has a much clearer oversight of cybersecurity risks, but that’s not the only benefit. The new structure has also allowed the IT team to provide better service to the business units, making for happier staff.
It was no coincidence, says Bell, that employee engagement was low at the same time as the technology was outdated and not fit for purpose. Raising employee engagement levels was one of the key measures of the transformation’s success.
“It’s about demonstrating to staff that you are investing in them as well as in technology, and showing them that it’s a great time to be working at the organisation,” Bell says. “We were saying, this is going to be good for Fletcher Building, but also for you, our staff… Apriority became helping staff adopt a growth mindset, and having them get on board with the journey.”
Employee engagement has improved rapidly, rising from a rating of 61% in 2015, when the program started, to reach the company’s target of 85% in 2019.
But ultimately, the transformation was all about the customers, and equipping Fletcher Building staff with the tools needed to better serve those customers.
“Customers can be quite unforgiving and can even be unreasonable at times. However, they pay our bills and ultimately drive the company’s success. We simply have to do the right thing by them,” says Bell.
“We are absolutely committed to having a position where our Fletcher Building customers and our end consumer customers are proud of the service we provide them. Gradually, we are moving that dial.”
From a very low rating of -2% in 2015, customer satisfaction for Fletcher Building’s group technology is now at 33%and accelerating towards the company’s target of 55%.
“I’m very optimistic about the future, and that Fletcher Building will be a force to be reckoned with in the marketplace because it is investing not just in technology, but in people and business-led change,” Bell says.