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Saving Eskom billions

Sal Laher, Eskom’s new CIO, has driven a stunning 14-month turnaround in the public utility’s IT division, taking it from total breakdown to the organisation’s top-performing division.

BY  Axel Bührmann , 2 December 20130 comments

Sal Laher, Eskom, believes his many years of IT experience was one of the factors that enabled him to come up with a convincing business plan. | photo: Karolina Komenderaphoto: Karolina KomenderaSal Laher, Eskom, believes his many years of IT experience was one of the factors that enabled him to come up with a convincing business plan.

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Amonth after joining Eskom in April 2012, its exco informed Sal Laher that his new division’s performance was so under par, it had received the lowest score of any division in the enormous organisation.

“The board told me our compact score – which measures and determines everything a division does – was two out of five,” Laher recalls. “By the end of that financial year, we received the highest score of any Eskom division with 4.2 out of five.”

It’s been a rough ride for the IT department, one of the largest in Africa, with more than 2 000 IT professionals servicing 54 000 users in 543 locations.

Laher clearly relishes a challenge. On becoming CIO, he immediately began tackling a multitude of problem areas, such as low productivity, lack of leadership, indecisiveness, low morale, a non-existent business plan, lack of discipline and no change control.

Immediately significant was Laher’s initial fear that Eskom’s datacentre could burn to the ground at any time.

“ The power feed was l iterally burning, key systems were lost for up to eight hours a day, and we had all those crises you read about in the papers,” he says.

This included Eskom losing its online vending system just before Christmas, which meant people in the townships could not buy electricity.

“There was a ‘priority one, burning platform issue’ every day. The business was going mad because they would lose a major system for generation, distribution and transmission – essential for keeping the lights on – for around five hours at a time.”

Time to change

An urgent turnaround plan was needed. Laher spent time in various business divisions, examining operating models, objectives and mandates. In drawing up a new business plan, the IT division scrutinised both Eskom’s wider corporate business plan and its own SWOT analysis.

“The real key for me was creating my own Gartner quadrant, where I identified my division as an IT-centric, inward-to-IT cost centre,” he says.

As a result, Laher created a business plan that laid the foundation for the IT department to become a strategic partner of – and technology enabler for – Eskom within 12 to 18 months. It also set the organisation on a path he believes will see it morphing from a “utility company that ‘does some technology’ to a technology company that creates electricity.”

His plan included reorganising the IT department into a simplified, integrated structure. Now everyone knows where they fit in and what their mandate is, he says.

This restructuring further dealt with Eskom’s IT architecture, its ‘engine room’ of applications, infrastructure and analytics, and the projects and programmes to support them.

Laher further addressed risk, information, governance and support services by creating an IT steering committee, a management committee, and enabling operations to meet these demands.

Strong foundation

“The business plan noted that the foundation of any good IT organisation is predicated on four areas: infrastructure, people, process and suppliers,” he says.

“We also talked about entrenching good application delivery, project delivery, reliabilities, resilience, single points of failure and SLAs.”

The plan wasn’t kept in-house; besides the Eskom exco and the board, it was presented to staff, published on the website – and shared with Eskom’s suppliers.

“My years of experience in IT, my ability to lead, my drive and understanding of IT allowed me to come up with a business plan that convinced the board it was going to make everything better for Eskom,” he says. “I fought for, and received, the investment required to fix IT.”

The next step was working with McKinsey to motivate staff. “We got our people to realise they are part of something big, and that together we could – and did – turn everything around,” he says.

“A number of quick wins, which was the secret to motivate them, led to a rolling ball effect that gathered pace.”

Bolstered by his understanding of the positive role a well-run, state-owned enterprise can play in its potential domino effect on the economy, Laher shone the spotlight on transformation. “I’ve built local talent and skill, with more than 90 percent of my workforce now consisting of black men and women,” he says.

It’s been a hard but dazzlingly successful ride. Eskom hasn’t seen a priority one incident on 42 major critical systems in eight months. Group IT contributed savings of R1 172 billion to the company by eradicating wastage. And an independent audit says Group IT has regained the trust of Eskom executives.

Other achievements include refreshing 65 percent of Eskom’s servers, virtualising some 6 500 VMs, implementing new SAN devices and – with replication – eradicating its legacy tier-three storage infrastructure. It also moved the organisation from Windows XP to Windows 7 and 8, and by arming its executives with new slates and ultrabooks, has made board and exco packs paperless.

Eskom also became one of only four companies in the world to achieve SAP Centre of Excellence accreditation with a very high score of 182 points out of 200.

Future plans

But there is still work to do. “We run about 100 IT projects a year, and initially 50 percent or more were failing. My project criteria are simple – to deliver to scope, budget and on time. Our latest KPIs show we are delivering 70 percent of our projects, with only 30 percent unhealthy. I will fix those in time.”

Another measure of Laher’s success, as he wryly observes, is that his portfolio increases almost daily, some of it outside of IT. “I’ve been asked to take on more of operation technology and Eskom Telecoms, and lead and manage all of Eskom’s CAPEX as well as labour relations with the unions,” he says.

“I will meet with the communications minister soon to talk about Eskom Telecoms, Broadband Infraco, and my ideas around running data over the transmission networks to help to solve our broadband issues.”

Looking beyond Eskom, Laher says one of his visions for the future is driving e-government and using technology to fight fraud and corruption. It’s a vision one hopes he will make reality, come hell or high water.