https://deloitte.wsj.com/cio/kyndryl-cio-go-fast-go-big-go-global-7172f41d
Fresh off a spinoff, Kyndryl carried out a transformation program aimed at increasing agility while keeping professionals’ and customers’ needs at the forefront
By: Katherine Noyes, senior writer, Executive Perspectives in The Wall Street Journal, Deloitte Services LP | Published on Feb 23, 2024, 2:00 PM
When Kyndryl was spun off from IBM in 2021 as a stand-alone IT infrastructure services provider, Kyndryl leaders were aware that many of its 1,800-plus applications were now dated and too complex to be cloned.
“By and large, those systems weren’t fit for purpose for running an independent business,” says Kyndryl CIO Michael Bradshaw. “It wasn’t just about the cost structure and the technologies but, more importantly, the agility of these systems.” Flexibility, in other words, was paramount.
What followed was a two-year transformation program completed this past fall. “The effort demanded establishing a long-term vision of a lean, modern, and secure operating environment, a plan to align support across the company, and a relentless drive to deliver,” Bradshaw says. “We use the terms restless, empathetic, and devoted to describe how we align with our customers and each other to seek more knowledge and understanding and to meet people where they are.”
In a recent interview, Bradshaw expounded on his team’s experiences during the technology transformation aimed at challenging, modernizing, and simplifying the technology estate and improving the way the company engages with its customers and employees.
What were your guiding principles for achieving sought-after outcomes following the spinoff?
Bradshaw: We gravitated toward five core principles:
Data-centric. Business data is the key enterprise asset—not the applications or other things we might typically get caught up in.
Platform-first. We focused on strategic business cloud-based platforms to help us exit the transition services agreement (TSA) in 24 months. We chose to emphasize platforms over single-point solutions, which helped us to sunset hundreds of applications.
Automation-led. We focused on this predominantly in the infrastructure space—especially infrastructure-as-code over manual configuration.
Talent and people. We brainstormed: What skills do we need? How do we identify the folks on our teams that have them?
Cybersecurity. We’re building toward a zero-trust environment to help prepare us for the future.
What are some of the milestones you’ve achieved so far?
With almost 90,000 employees at the time, our philosophy was, “Go fast. Go big. Go global.” In the fall of 2022, we gained the ability to get data out of IBM for our financials. That was followed by setting up our initial ledger, which we started running in parallel with the legacy ledger early last year. In August, we completed the migration of all 66 countries in which we do business from our legacy systems into our new platforms. Just recently, we had what was essentially our “Independence Day,” or second-year anniversary of becoming a company and the end of our TSA with IBM.
What have been some of the top challenges along the way?
We had aggressive timelines, and there is technical work still to be done to fully modernize our network, but the really challenging piece is the impact on our employees. If you think about it, we changed everything to which they were accustomed. Our focus on change management had to be relentless because the last thing we could afford during this transition was to impact delivery to our customers. We had to make the change management very simple and logical for our professionals, relating it to what they do every day, so that they could continue to focus on customer delivery. Our mantra was to overcommunicate, and to be fun, creative, and innovative in leveraging our communication channels to inform and engage our employee population in the change. Our communications team, for example, publishes a corporate e-newsletter that is punchy and plucky, and we used it to highlight the fun and humor associated with all this change. That and the complete alignment of the C-suite helped us get the job done and progress toward cultural transformation.
What quantifiable benefits have resulted so far?
We started with north of 1,800 applications in our portfolio, and we’ve reduced that by more than 80%. These are order-of-magnitude types of numbers in terms of reduction in complexity. We eliminated thousands of data interfaces and many independent and isolated data solutions. We’ve simplified that entire ecosystem, and that translates to the capability that we now can provide to the business. It will play a major role in significantly reducing our company’s selling, general, and administrative expenses over time.
While these quantifiable benefits are important, maybe even more important is how these platforms are enabling us to reduce the daily friction for our employees as they deliver value for our customers. Every day we “live in the platforms”: We get better and more efficient in how we use them toward that ultimate objective.
What remains to be done?
The intent was to first establish our business, and then, as we morph and change how we want the business to run, figure out the next iteration of capability we should focus on across our platforms. We’ve laid the foundation and shared minimum viable products with senior business leaders. Now that we’re through the TSA and have done the heavy lift for the back-office systems, we’ll focus on the front office to provide even better experiences for our customers. One early priority, for example, is our sales management process and the tools we use to generate proposals.
Looking ahead, we plan to continue focusing on what we call our 3 A’s: accounts, alliances, and advanced delivery. We’ll continue to modernize assets like our commercial network. As we focus on the front office, improvements there will not only be key enablers of our strategy but also support the drivers of revenue growth.
What are some of the lessons you’ve learned on this journey?
If I could have brought the business teams to the platforms sooner to better familiarize them with those capabilities, that could have eased some of the change management challenges and might have made for an easier transition for our teams.
The other circumstance we’ve come across time and time again is when teams try to craft perfect solutions. We subscribe to the mantra, “Don’t let perfection be the enemy of good.” Our approach is to get the solution to the right business owner and then come back and refine it later as needed.
Finally, this wasn’t just an IT transformation—it was a business transformation, so in getting everybody aligned with and supportive of our approach, business leaders had to be part of the effort. They had to focus on transformation in addition to operations to support the appropriate change management practices. The sooner that happens, the more productive teams can be.
What advice would you offer to other business leaders embarking on journeys like this?
Establish unified senior leadership with a collective understanding of expectations, and also create a transformation team. It’s important to map the transformation to the company’s aspirational culture as articulated by the senior leadership team, including what it wants to be known for and how people will work together. Finally, you cannot start change management soon enough. If you don’t address culture, and you don’t understand how to get the teams ready for change, you can deliver the best transformation in the world, but it may never produce the desired outcomes. I never forget the saying “Culture eats strategy for lunch.”