STRATEGIC ISSUES for rey writer

Company: CSC Australia Size: Large Industry: Information Technology Services Business Activity: Professional, scientific and technical activities Type of Entity: Public Corporation Number of Employees: More than 10,000 Country: Australia Headquarters: Virginia, U.S.A. Yearly Revenue: Greater than $25 million Gender: Male Subject: Accounting、

Michael_Horton_Issue_1: Can you describe an important issue that you had to resolve? My name is Michael Horton I work for CSC in Australia. I represent the area of account management across Australia mainly for our natural resources clients but also for our government clients. The issue that we are going to discuss is around the laptops and desktops that our staff use and how do we acquire them how do we track them and how do we pay for them over the period of their useful life which is usually three to five year? The problem is how do we account for them on the books? How do we pay for them? Do we buy the whole lot at once? Do we buy them in a staggered fashion, so many a month or so many a year? What we do at the end of the 3 or 5 year period in terms of disposing of them.

Michael_Horton_Cause_1: What caused the issue and why was it important? So, the lap top and desktop issue, how do we purchase them how do we go forward and track them? How do we account for them? The cause of the issue that we have at hand here is financial. It comes down to how we want to carry them on the books or whether we want to carry them on the books at all. It affects in- year profit if we are going to expenses them. It affects in-year profit if we are going to depreciate them. It affects in-year profit if we are going to lease them. Different scenarios can play out here. Therefore we have to look at all the factors and what is the best path forward.

Transcript

Michael_Horton_Q1: Can you tell us a bit about yourself and your career path to date? My name is Michael Horton. I am the vice-president for the natural resources sector for C.S.C. in Australia, C.S.C. Computer Sciences Corporation. We are an IT services organization. We predominantly do outsourcing systems integration for typically large corporate customers and government. My patch in Australia, I am responsible for about $400 million worth of annual revenue and matrix responsibility for about 2000 employees. Michael_Horton_Q2: Can you describe a typical workday for yourself? Every work day is completely different, but also the same, so although we are in a technology industry, what we are doing is selling people to people, so we get our revenue from people providing services, so my day is typically made up with meetings, a mix of internal and external meetings, and on my end, on days that I am travelling, which is quite regular, probably half of my working day, working life is spent travelling, they will be specifically built around client meetings, and then I fit in the internal staff meetings. When I am back here in the office, like I am at the moment, we catch up on the things we need to just to keep the business running, and the day to day stuff, and I need to weigh that also with some client meetings with local clients, so all day spent talking, basically. Michael_Horton_Q14: Can you offer any insight about how an organization might develop its human capital? People development comes and goes with time and the flow of, are things going well in the company profit wise, and I have been with the company here for 17 years and I do not think we are any different to any other company, but when times are tough, the first thing to get cut is the training budgets, and it is not often done with any malicious intent, it is just an easy target, but also when things get tough, the time being spent developing people is also more easily put aside, and it is actually the time that we need to go the other way around and concentrate on developing our high performance high achievers, and looking forward, so what naturally happens we have to fight, and do the unnatural approach of developing people, and so I think that comes back to leadership at our level to make sure that we do that. Michael_Horton_Q12: How do firms collaborate in this industry. Michael_Horton_Q3: Can you describe how your company created its mission and vision statements and how often they are reviewed? The mission and vision statements are not necessarily reviewed at the higher level very regularly. Our mission is to provide I.T. services to the corporates and to government entities, and has been for many decades. What is reviewed is where we focus our attention, and that will be in particular industries, or particular client sets, and that will change according to market shifts. Michael_Horton_Q5: How is your company structured or organized? It is a matrix organization, and it is very typical of many large corporates, so we will have verticals that will concentrate on the industries, and horizontals that will allow those common services together across those industries, and those verticals and horizontals exist by the geographical levels within Australia in my instance, and also the global level, and so I am part of the vertical, so I am part of the natural resources vertical for the globe and that way I have clear line of sight through all the way up to the top of the chain in that area, and therefore can leverage knowledge globally in that way, and you will see that in my tricks repeated throughout the globe. Michael_Horton_Q4: What does your organization do and how is it different? The difference is I.T. for large organizations can be very complex and we bring together economies of scale both in knowledge and thought leadership in that area, but also in a more simple economies of scale such as data centre and software licensing for large organizations. You know the key thing with I.T. is it is such a global business. People who have expertise, for instance, in S.A.P. in the U.S., equally useful in Australia, and so by bringing that together we can bring a good solution and a set of deliveries to the clients. Michael_Horton_Q8: Who are the customers of your company and why they buy its products or services? The customers are large mining companies, large oil and gas companies, an example is B.H.P., Rio Tinto, Woodside Petroleum, Impex; they buy our products because we have proven capability, we have got global capability, and at the worst case we have got, we can be sued, we can step up to liability, clauses that are expected in the contracts. Particularly in these industries, there is a lot of, huge focus on areas such as safety, and our staff have to be able to work to those stringent safety requirements and be best practiced within those areas, even within that organization itself. We have got people who are remotely located throughout Australia and also, they go offshore, to the offshore platforms, have the HUET certificates, which are helicopter safety survival certificates, these are some of these examples; and that is not something that you can go and get from any old I.T. company down the road. And at the end of the day it comes down to relationships and trust. We have got great relationships with our customers at the levels that we need to and the trust has been built up there over many decades. Michael_Horton_Q9: How can a company address a situation of failure, where an internal project is failing or where demand for its products or services is declining or disappearing? Well you know, obviously, in a large organization like ours, we have, we do a lot of projects, at times have even in my section had many hundred projects running at any one time, and we have gone through patches where projects have gone bad, or a whole series of projects have gone bad, and there was one particular point, it would have been about four years ago where that was occurring, and we were not easily able to find the reasons, so what I did is I actually went back and sat with the project managers and went through a life cycle, a typical life cycle of a project, so I was sitting down with a customer gaining the requirements and working right through the whole life cycle. I actually went and did the training with them, sat on their training to see what they were being taught, or what we were teaching them, and a lot of learning came out of that, and probably the biggest learning was that we were training our guys to stringently follow process at the expense of listening to the customer and listening to things that were changing, so what we have been doing and what we further need to do is give them the very solid disciplines of project management and then step back and take them through leadership training and teach them about leadership and people skills to overlay that over the top. Michael_Horton_Q7: Can you describe any key events that occurred either in your life or that of the organization that were crucial to success over time? With this question, the answer is often there is a lot of good luck, but in some ways you create your luck, and an example here is I am located in quite a remote location, Perth, it is the most remote capital city in the globe, and there is a couple of, there is one key industry here at the moment which is booming, and that is mining and oil and gas, and luckily for me, I will say luckily, C.S.C. acquired B.H.P.I.T. back in 2000, and so for us here in Perth, in C.S.C., it put us in such a fantastic position to go forward and build on that and get our market share in a market that is growing, and one that there was very few competitors and very few companies that were based in our remote capital city that had global capability, so it is taking what you are given, that luck, and building on it, and enhancing it and going forward from that, and I think that has been a good reason for our success. Michael_Horton_Q15: Can you describe the industry within which your company operates? Western Australia, at the moment, has around about 200 or more billion worth of capital projects underway at the moment, or about to start, so it is an extraordinary amount of work in the natural resources area, and our population is very small, 1.8 million people. That number of people cannot execute those projects, and once those capital projects are complete, the things that are being built have to be run, so the oil and gas platforms, the mines have to be run, and again, we do not have the resources to do all of that, so what our industry, the I.T. industry and in particularly my area, natural resources sector, needs to do is work with these companies to enable them to automate a lot of their prices both in the build and also in the run, and the automation will mean that we can do a lot more with those 1.8 million people than we possibly would have done with doing things the traditional old way, and at the same time, help with the safety issues that we face on, you know, in these dangerous environments in mining and oil and gas, but also with the environmental issues, so with automation you can better control the environmental controls that need to be put in place, so I think the work that we are doing and need to do needs to push into that automation supported by the I.T. side of things and I think it is the only way for it, that we are going to achieve all the work that has got to be done, and effectively help Western Australia and Australia grow their G.D.P. going forward. Michael_Horton_Q17: What big issues will companies in your industry be addressing in the next five years? There are a couple of things here. There is going to be extraordinary salaries offered and there is going to be a lot of maintaining a sense of reality, because I think anyone with very good skills and good ability is, the world is their oyster, so just be sensible with it and do something that is going to be long term benefit, do not look at the short term benefits. Michael_Horton_Q19: Can you offer more insight about competition in the industry? Michael_Horton_Q18: How do firms compete within this industry? So the I.T. services industry is changing a lot and very fast and the biggest changes, a lot of the services being offered or being requested are commoditized services, and so we are now seeing new entrants into the market, new competitors that we never traditionally had, and an example is the cloud type technologies, so we are now competing against companies that were our service providers in the past. Google, Amazon, even Microsoft, who in the past were service, or not even service providers, but in the background they are now head to head competitors, so a big shift in the market and it means that companies like C.S.C. need to move away from having to compete head to head with them and move into more niche markets. My opinion is we have got to concentrate on where are the vertical industries that we have expertise in, and go after that and move away from the commodity market. Michael_Horton_Q6: Can you comment on the strategic direction of the firm? There are probably two things there. The clearest one is the area that I am responsible for. I can give a very clear direction there on what we are doing, and it probably mirrors at the higher level, the corporate level, so it is as simple as we are looking to get ourselves into an area of the market where competition is lower and that we have expertise that is recognized in that area, so my area, natural resources, we supply I.T. services to mining companies and all the gas companies, and we currently have 56% of the market, for I.T. services here in Australia, so we are recognized in that market, and therefore reference ability is already there, so that when we go and bet on work with a mining company, it is often we are only competing against one or two other competitors and most usually we're sole source incumbent type, so we already have a relationship with the organization, so our strategy and direction is to push more into that niche part of the market, and therefore protect our incumbency and grow at that way and when you are not having to compete so heavily, obviously the margins are going to be better and you are selling more on a value proposition rather than a cost proposition.