See also: Vodafone CIO Albert Hitchcock on investment models
“We see ourselves as an integrated communications provider, way beyond mobile, although that is of course our DNA,” says Albert Hitchcock, CIO of Vodafone Group Services.
Think Vodafone and many naturally think of mobile telecommunications, but just as Vodafone has outgrown an office above a curry shop in Newbury to take over an entire campus on the outskirts of the Berkshire town, telecommunications can no longer be divided into mobile and fixed.
Communications sprawls across enterprises, lives and nations and its future growth is exponential, and so Vodafone is today a global leader in communications, if best known for non-fixed-line services.
“We are not just mobile now, we are moving into being a complete end-to-end provider, offering DSL, fixed line, broadband and enterprise offerings,” Hitchcock says.
Vodafonehas 398 million customers around the world, equity in 30 countries and partnerships in a further 40, which puts a Vodafone network of one form or another in five continents.
In India Vodafone has a significant fixed-line and fibre network.
The emerging economy has been significant in Vodafone’s recent history, as the company operates a joint venture that constructs base station towers for mobile networks.
Hitchcock says it learnt a lot of lessons in its history as a mobile trailblazer that have shaped the way it moves into markets and deploys its infrastructure and technology.
That history and brand reputation mean Vodafone is a popular partner for networks organisations around the world.
“Vodafone has a lot of depth of knowledge and in the firm there is a lot of understanding of how you build efficient networks, work with suppliers and use intellectual property,” he says.
With size and globalisation comes complexity and criticism, to which Vodafone hasn’t been immune.
Of late the company has been caught up in tax avoidance protests following accusations that it places its profits in a Luxembourg company that was set up during the acquisition of German telecoms firm Mannesmann.
Vodafonehas already paid £1.25bn to HMRC after a long legal battle with the tax collection agency, but critics claim Vodafone has avoided a £6bn tax bill following the settlement.
Overseas Vodafone shut down its voice and data services in Egypt at the request of former leader Hosni Mubarak, and was criticised heavily by backers of the Arab Spring and UK newspapers, but the company pointed out that it is obliged by local law to do as requested by the national leader.
In recent months there has been speculation that Vodafone will acquire ailing fellow UK-based networks giant Cable & Wireless Worldwide.
For Hitchcock the pressures of an organisation this size is not political, but technical.
“Tablet PCs, entertainment devices, machine-to-machine technology, SIM-based automation in cars, and vending machines means there will be billions of interactions on our networks. Mobile networks will be at the heart of this and it is fast evolving,” he says of the challenges facing the technology teams at Vodafone.
“Network technology is not just about throwing more equipment at it. Traffic is changing and 60 per cent of it is video so as an organisation we need to look closely at traffic management techniques and at ways to make the network more efficient.”
As well as improving the infrastructure behind the service, Hitchcock and his IT teams are key to customer retention strategies at Vodafone.
“In India we have 140 million customers, which means the customer experience becomes much more important. So customer decision technology which predicts churn is a key strategic move we are making.
“There will always be pressure from regulators and customers and that will rely on us in IT to have to be even more efficient. We are almost a utility as the network, so the underlying infrastructure has to be very efficient and to do that we need to leverage scale,” he says of the role’s pressures.
Vodafone’s Group CTO Steve Pussey is on the board of directors and owns the technology strategy, Hitchcock says.
“In service providers the majority of the spend is on networks – it dominates the capex,” he explains.
As global CIO, Hitchcock is responsible for the IT strategy and the delivery of IT across the Vodafone Group.
He includes datacentres, infrastructure, computing environments, cloud provision, deployment of applications and services, IT security and delivery into local markets among his considerable responsibilities, with local market CIOs reporting to him.
“We spend £2bn a year on IT and I have end-to-end responsibility for that spending. IT is becoming evermore important after the networks because the end customer experience is a customer’s judgement so the IT is becoming central to that experience, whether it is in retail, on the web, via billing, apps or the content they use from us. It is all enabled by IT.”
For Hitchcock the IT strategy has two pillars. The first is to provide Vodafone with competitive advantage through the delivery of IT, he says.
Hitchcock explains that this has to include a world-class customer experience, whether in-store, through the call centre or online. To deliver this Vodafone has been working on a single customer view through consolidating its CRM systems.
“We need to understand all the different connection points so that we know the products and services a customer has purchased and use that to offer a better customer service.”
His team has delivered an integrated retail and online tool. “Underpinning that is the use of analytics on the network and on customer experience. We are looking at new types of service, be they financial offers or coentent. We have a trustd relationship with the customer and we can use that to create new revenue,” he says.
The second pillar of the strategy is for Vodafone to use its scale.
“We never fully integrated all the other markets and so have put in place a very prescriptive roadmap to standardisation. Where once we had different hardware in every market and you wouldn’t be able to connect to the network at each one, now there is a single network and a single supplier,” says Hitchcock.
The move to single suppliers was part of a shift to a standardised operating environment that has led to a procurement company being formed within Vodafone. Now Vodafone has standardised vendors in each IT domain, an example being a single PC vendor, one image, and one standard wifi connection no matter whether an employee is using a PC or an Android or iOS device.
“It took five years to get to, but it was a catalyst to renegotiate multi-year deals with Oracle, SAP, Amdocs, Terradata and Microsoft to deliver singular relationships across the Vodafone world,” says the CIO.
“We have large scale and we save them money. There is a solutions catalogue which has put a stop to the RFP activity.”
Verizon Wireless, the US network that Vodafone owns 45 per cent of, joined the scheme to increase the procurement volume and the strategy has outstripped the IDC benchmark for procurement.
“We had datacentres in every market, now we have just five: three in Europe, one in South Africa and one in India. The entire estate has been virtualised so that 88 per cent of our computing can sit in these five locations.”