BellSouth CIO Fran Dramis Discuss Its Technology Transformation

Change is hard. Even when the benefits are obvious, it takes a lot of determination to get an organization to do things differently. But Fran Dramis is a determined sort of guy; he’s developed a detailed blueprint for guiding corporations through the challenging process of technology transformation.

Dramis spearheaded major technology makeovers as a consultant to Bankers’ Trust, Citibank, Coopers & Lybrand, NASD and Xerox, and in the process he served as acting CIO for divisions of all those companies but Xerox. Now he is entering the final phase of a so-called technology transformation at BellSouth in Atlanta. As executive vice president and chief information, e-commerce and security officer, he’s helping the Baby Bell morph from what he calls a “transport company” optimized around voice circuit switching to an information services company that adds value to its voice and data transport business. (For example, customers might pay extra for prioritized routing or to have BellSouth store a backup copy of the information being transported.)

It’s no small task, but Dramis knew what he was getting into when he accepted the job at BellSouth in December 1998. One big condition was that he had to report to the CEO. Having led technology transformations before, he knew that “if it’s not center plate for the CEO, it takes twice the amount of time.”

With the full backing of his boss, he launched into his tried-and-true change program. Dramis calls it a fairly straightforward gap-analysis process, which he refined during six years working as a consultant, CIO (at AT&T Information Systems and Solomon Brothers), president (of a utility industry software services company) and CEO (of a network integration company). The process has three phases:

1. Engage the business to develop a technology transformation road map.

2. Build the enabling technology necessary to get the company on equal footing with competitors.

3. Gain business leverage by moving toward the desired state of technology.

Phase 1: Create a Road Map

In this first phase, Dramis gives business unit presidents a series of questions about their technology, and makes them present their answers to the chairman and CEO and his staff at an all-day meeting. The questions range from the simple (How old is each system?) to those requiring more soul searching (How do the capabilities of your systems compare with those of your competitors?).

The questions are designed to help the executives assess their portfolio of systems and gauge whether they’re sufficient just to stay in business. Dramis refers to a shortfall as the enablement gap. Closing an enablement gap doesn’t produce a competitive advantage. It just gets you into the game and provides a base on which to build. “Many transformation efforts fail because businesses try to get a return on investment without closing the enablement gap,” he says.

The purpose of the road map phase, Dramis says, is to engage business unit leaders in the process of technology transformation. He refers to this phase as “wallowing in the current state” and likens the meeting in which business execs own up to their technological inadequacies to a group therapy session. “Somebody comes up and says, My name is Bob, and I have lousy systems,” Dramis says. “And we all say, Hi, Bob, and we go forward.” The end goal of the road map phase is being able to describe the desired state of technology and developing a plan for getting there.

Phase 2: Make the Transition

In this stage, Dramis sets standards and, if necessary, centralizes IT operations. This is the point at which enabling technology is built. In BellSouth’s case, closing the enablement gap meant putting in fairly extensive middleware to connect front-end e-commerce and Web-based systems to back-end systems. Companies also assess potential IT partners in the transition phase, deciding whether to outsource some base-level systems.

To ensure that a company’s IT investments are in sync with the technology road map, Dramis uses the transition phase to institute processes that make it harder to spend money on undesirable systems. If managers want to buy systems that won’t close the enablement gap, they need approval from Dramis and their business unit president; if they want to invest in systems that will help close the gap and can be built on, they can just go ahead and do it as long as they have the budget. By discouraging investments in systems that would not close the enablement gap at BellSouth, Dramis has been able to divert more than 50 percent of the money the company would’ve spent enhancing nonleverageable systems to what he calls directionally correct systems.

Phase 3: Leverage Technology

By the third stage, responsibility for technology shifts back to the business units. Now that the company has closed the enablement gap and has the necessary technologies in place, it can start building off that platform and really reaping the benefits of IT.

At BellSouth, the capital crunch affecting the entire telecom industry has forced the company to reduce its capital expenditures by more than 30 percent. Dramis is now in the process of restructuring his group as part of an overall corporate downsizing. But he insists that job cuts are normal at the beginning of the leveraging phase; the corporate downsizing initiative just sped up the process somewhat. Still, BellSouth is already starting to see the payoff from the technology it has begun to leverage.

Thanks to Web interfaces developed during the transition stage, around 10 percent of customers signing up for BellSouth’s DSL service do so online. A new ordering system, which facilitates online ordering and is used by call center reps who handle phone orders, has allowed the company to cut the cost per subscriber by more than 50 percent. The company tripled its DSL subscribers last year and plans to double them this year.

Dramis also notes that BellSouth was able to cut development time in half for the previous three major systems it implemented: the DSL ordering system, a sales-force automation system, and a GPS system that, in combination with a new dispatching system, will save BellSouth hundreds of millions a year.

Captain of the Change

Dramis’s ability to lead an enormous company like BellSouth through such a transformation hinges largely on his skill as a change agent. He compares his role to that of an expert captain in a sailboat race. “If the leader of the race is going 50 knots and your boat is only going 30 knots, you need to try to get more wind to the sail,” he says. “A good captain will get the sail right to the point of ripping. And that may only be 40 knots. But if someone says, I’ve got to get to 50 knots, and they rip the sail, the boat stops and they’ll never win. A good change agent stretches the culture to the point of being disruptive but stops right before that.”

Getting the boat up to 40 knots re-quires persuading a whole lot of people to change the way they do things. “In a technology transformation, I have to somehow convince the person working night tour computer operations to turn right instead of turning left,” says Dramis. “You need the ability to articulate to people the need for change and link into something inside the individual which has meaning to them.”

For example, as leader of BellSouth’s Business Continuity and Security Council, Dramis needs to figure out what will get employees to buy in to new security practices. Some employees are motivated by pride of country, others by the need to secure their families, still others by the need to ensure the continuity of the business?their source of livelihood. “Whatever it is in the individual, a leader has to be able to go there, and have the person go there,” says Dramis. “Even good change is difficult. Leaders have to find out what will get people to be OK with the uncomfortableness of change.”

Linkage in Action

To make sure BellSouth’s 200 senior technology leaders understand how their actions tie in to the company’s technology transformation effort, Dramis calls them all together for monthly half-day conferences.

Dramis keeps his finger on the pulse of day-to-day operations and the progress of the technology transformation by meeting every Tuesday for an hour and a half with everyone who reports to him, as well as their direct reports?a group of about 20. The only agendum at this meeting is for each participant to report on the two most important things his group is working on. Period.

“We use this as a place of intervention to ensure alignment,” Dramis says. “By holding the meeting religiously each week, we’re only ever one week out of alignment in any one area.” He then publishes the full list of priorities and makes random follow-up phone calls. People pay attention to the weekly list because they know they might hear from the boss. His main purpose in calling, says Dramis, is not to quiz employees but to give them a chance to ask him questions and share their thoughts about the list of priorities.

Making these calls is part of a day’s work for Dramis because he believes so strongly in sharing his executive-level perspective of the business with the people in the operational trenches?and linking that to the need for change.