CIO50 2019 #15: David Kennedy, Transaction Services Group

TSG is transforming from a New Zealand based payment processing company to a global revenue management solutions company, says its CIO David Kennedy.

IT was first out of the blocks to create a Target Operating Model (TOM) that has led to a transformation in IT, says Kennedy.

“Following on closely we started a number of separate digital transformations aligned to the above strategy.”

“We initiated digital transformations in Australia, UK and New Zealand to evolve our client and customer experiences, he says. These transformations included our client visible software and back office operational platforms.”

More recently, he says, the organisation has also come to realise that their management systems and operational functions would benefit from an enhancement to adapt to the new size and complexity of TSG.

This growth can only be described as an “explosive rate”, says Kennedy.

“We are truly lucky to be able to grow a company that is headquartered in New Zealand at this rate across the globe.”

Since Kennedy joined the group, their customer numbers have risen from two million to approximately more than five million. They have new businesses in many new markets, including Europe, the USA, and Japan.

The way in which IT has transparently created traceable value from ideation through to implementation of the new processes has been identified across the group as the blueprint for success, he says.

So much so that Kennedy is now collaborating with other executive team members and discussing strategies to “move the dial” on their respective TOM creation.

Kennedy is collaborating with departments across the Group, both vertically in the functions and horizontally across the regions.

This is an upside for the company as it continues to transform for the digital era, he says.

“We are aiming to have a consistently applied approach to TOM implementation which will reduce the cost of implementation and overall operation.

“This means that IT help digitise each department as a matter of course as we are now partnering with the accountable executive to transform their departments,” he states.

In line with the business strategy to truly be global player in the revenue management solutions space, he says the group has operations in 13 countries in four continents, acquired six companies in the last six years, and continued its double digit organic growth year on year.

The integration of these acquisitions is assisted by the regional centres of excellence and TOM control framework.

But with this growth comes the primacy of focusing on the culture that will be in step with these changes.

“We have created a culture that is continually challenging itself at every opportunity,” explains Kennedy.

His department holds quarterly awards for those people who have identified the most value gains possible through making changes. We celebrate our successes.

“We also have a very open culture for disruption identification and defence,” he says.

Every staff member is trained and encouraged to spot where disruption could occur in their sphere of influence.

Once identified, the disruption defence process takes over to eliminate the possibility of disruption, he says. They do this by either partnering with a provider to offer the value to the customer or altering their processes to add the value that is the potential disruption opportunity.

Governance is one of the key focuses of the overall business over the past year.

During 2018 it has become apparent that the current governance structure would benefit from an enhancement to adapt to the rapidly expanding organisation, with a global footprint.

He says the new governance model will also factor in some of the lessons learned from the change management programmes they have implemented over the past few years.

“It is exciting to enhance our governance system as we are a much bigger organisation this year than we were last year. Also, our strategy is to continue to grow which again will benefit from this enhancement.” he says.

“This will create a step change in our journey to become truly global,” he says.

Laying the foundations for growth

A few months after joining TSG, Kennedy developed a single IT Strategy that encompasses six key words to drive alignment, collaboration and growth across all TSG companies: “Kill complexity, Create time. Think big.”

The next year, he created a single TSG Global IT Target Operating Model (IT TOM). The model addresses all of the needs of each company in the Group and was achieved through extensive collaboration.

“From this model we have been able to successfully implement a multitude of transformational projects that have added considerable value,” he says.

In 2018, TSG has been able to increase its growth trajectory as solid foundations are in place.

This provided them the infrastructure to create regional centres of excellence for networking, security, data analytics and cloud operations.

“These have effectively meant that we have created a slick, service-led organisation that is now measured on a set of KPIs that are agreed with each stakeholder. This has led to proactive positive stakeholder conversations instead of the exception led conversations which were commonplace before my arrival,” says Kennedy.

As well, he says, they have shifted the tone of the conversations between the technology teams and rest of the group. “We have created a two-speed IT shop.”

“This means that the slower BAU activities and processes run smoothly at a certain pace and we have a faster secondary operation which can react to a business threat, opportunity or even the onboarding of a new large client. This reduces the pressure on the operational teams and has led to a culture where attrition is virtually zero.”

TSG is also creating a “Group API” which will be an open way for all their clients, customers and partners to connect to their systems and retrieve necessary information to create value for their clients.

“This will blow the doors wide open for integrations and connectivity for the future,” he says.

“The IT transformations under my remit are being treated as the lighthouse programmes. Our programme approach and processes are being used by other Group and Regional Executives as a way to increase value in their lines of business.”

Beyond ICT and TSG

Kennedy unselfishly shares his expertise on leading business technology programmes outside TSG. He is involved in a range of activities that help with wider New Zealand.

“I believe it is our responsibility as senior leaders to prepare the country for a future of successful international partnerships and domestic longevity,” he stresses.

For this reason, and to drive learning that improves his leadership skills, he is involved, among others, as chairperson of the advisory board for the Auckland University Future Leaders Programme. This is an unpaid role that he completes with passion to provide future leaders with the capability they are going to need to succeed as a CIO in today’s environment.

He is also chairperson of NZTech leaders. This is a group of IT executives that provides guidance to the government and industry on ensuring the future prosperity of New Zealand. “We are tasked with answering some of the toughest questions and are creating output that will impact hundreds of thousands of Kiwi families,” he says.

One of the reports they released was called ‘The Digital Principles, a guide for small and medium sized enterprises’, focusing on six areas that will make the most difference as they embark on digital transformation. They are working on an implementation guide to help companies that do not have the resources to implement projects in the digital world.

This year, a key focus of the group is helping industry and the Ministry of Education prepare the next generation to become productive members of society.

“We created a briefing paper on how we as a country must embrace the changes to industry, education and the workplace of tomorrow once the digital revolution is deeply integrated into our economy,” says Kennedy.

Last year, he was contacted by the Ministry of Education to speak to a group of Educators in the Bay of Plenty region. He was accompanied by Allan Lightbourne, another member of the NZTech leaders and chief digital officer of the Tauranga City Council.

They spoke to about 50 educators across the region. Their message outlined that in order for children to be successful in the digitally connected world they must learn a different set of skills.

“The pace of change has delivered a situation where the hard skills that are learnt could be surpassed and new skills are necessary for a role within 18 months,” he states. This phenomenon is driving a need for micro-education’, where we need to continually educate our employees as the capability needs change in business.

“My advice to the educators was to help the children understand their emotional intelligence (EQ) and improve their ability to communicate,” says Kennedy.

“These two skills will provide them the ability to adapt to situations, be resilient and maximise the value to themselves, their company and their country.

“This advice was welcomed, and we have agreed to pilot this focus in several schools in the region.”