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‘I’m a fan of IT, but I’m still a bit cynical'

Stephen Pritchard
Financial Times
2 April 2008

What IT means to me

The boss of PA Consulting Group tells Stephen Pritchard how important it is to keep up with innovation while retaining traditional forms of communication

Alan Middleton has the builders in. The London headquarters of PA Consulting, where Mr Middleton is chief executive, smells of fresh paint. Hoardings in the lobby and atrium show how the new, extended offices will look, with space for more staff and – vitally – more space for meetings, too.
Perhaps surprisingly for a CEO who has done much to bring his company into the digital world, meetings matter for Mr Middleton. On his watch, PA has become one of the first management consultancies to build a presence in Second Life, the online virtual world, providing experience that PA has drawn on to build virtual worlds for clients.
Mr Middleton previously served as head of IT for PA, overseeing significant advances in the company’s technology infrastructure and its ability to support remote and mobile working. He has backed investment in knowledge management, blogging, wikis and podcasts at PA. But he still puts much store on face-to-face meetings.
“I am not fearful of IT,” he explains. “I live in a 17th century house which is fully automated: the heating, light, sound system and even the garden. I can switch on the electric blanket from Hong Kong and toast my wife! In that sense I am a fan of IT, but I’m still a bit cynical.
“I get very frustrated by people’s dependence on e-mail, and everything else that reduces personal contact, but I’ve not been able to reduce it. We are a people business and we need to bring people together.”
Connecting people, he says, should really be why large companies invest in enterprise resource planning (ERP) and knowledge management systems.
“Our system captures who was in the team that worked on a project,” he says. “We publish that information internally, so I can run a simple search to find out who knows what. At that point we have a human bond, I ring that person and say ‘give me a hand’. The human link is simple but very powerful knowledge management.”
Such systems, Mr Middleton concedes, fall short of the sophistication often demanded by the knowledge management purists, with their multi-tiered systems and complex tables of metadata that require hours of consultants’ time to fill out. Yet they work. “If you come at it purely from an IT angle, these projects will fail,” he says.
According to Mr Middleton, PA’s internal business system Mipac (management information, planning and control) is driven by one objective: to connect people.
The first generation of Mipac, created in 1995, used Microsoft Exchange for messaging and accounting; and for HR, one of the first UK installations of PeopleSoft. On top of this came KnowledgeNet, the company’s knowledge management system, and the whole was linked by a hard-wired global network at “enormous cost”.
“That was five to eight years ahead of its time,” says Mr Middleton. “We still use the same business solution, but have evolved to what you would expect: lower cost, delivering the same functionality on new technologies and over IP networks and VPNs.”
PA was also an early adopter, and advocate, of mobile working. “We had some of the early [Apple] Macs and the first Mac laptops; I ruined several suits carrying those,” recalls Mr Middleton. “Then we moved to Toshiba laptops. Within a year, we had 2,500 consultants using them. At that time, it was a genuine business advantage and a differentiator.”
The challenge for chief executives, he suggests, is to keep up with technological change and not to become too satisfied with the status quo.
“Attitudes to technology are age-dependent,” he says. “If we have a partner joining us from another firm, he or she will say that our core stuff is fabulous and makes their life hugely easier. That is the traditional role of IT.
“But our younger people have a different view. I think that this is happening everywhere: the existing generation see new joiners as anarchists, while the younger generation sees existing business people as fuddy-duddies.
“People joining see technology as bringing the capability to interact with others, an enabler for their networking and zany ideas. This is a healthy tension that will drive change.”
One example was a presentation, eight years ago, of something that looked like today’s mobile e-mail devices.
“A partner from the PA Technology Centre held up a thing that we had built: a Palmpilot with a GSM module,” says Mr Middleton.
“He told us this was the future, and that in a few years we would all have a device with a camera on it, access to our diaries and corporate e-mail. It would be a phone and we would use it to surf the web – and that it would be about the size of a cigarette packet. Many said that the chap must be past his sell-by date. But he was right.”
One way companies can learn to spot such changes is to ensure their future managers spend time in IT.
Mr Middleton firmly believes that time spent running an IT project is just as important for executives as, say, a spell in finance.
All too often, large companies ask senior executives to “sponsor” IT projects, but those executives often lack the depth of knowledge, not to mention the time, to do so effectively.
At the same time, Mr Middleton has sympathy for the plight of the CIO, who is expected to innovate but also to deliver more with less.
“In recent times, by and large, CIOs have been squeezed really hard on cost. That is in a sense counter-intuitive, as revenues and profitability have been looking great in most organisations, yet CIOs were still being pushed to cut costs. “Now, as the world wobbles, the danger for CIOs is that the very things that bring value to the bottom line, the innovative things, have been squeezed in the last six years and there is no financial or human capacity left.
“Our business leaders are saying ‘be more innovative and funky’ but there is not a lot of bandwidth to play with.”
Increasingly, companies will look beyond conventional sources of business technology to deliver that innovation. PA, for example, has turned to social networking and user-generated content to help its own business.
“We are looking at how to further our knowledge management through the power of social networking techniques – such as Facebook and Bebo – in a business context. These approaches and technologies will need to reach their second generation before they are fully usable, but they offer exciting opportunities,” he says.
PA’s excursion into virtual worlds, in the shape of Second Life, raised eyebrows both within and outside the company, but has resulted in business wins from organisations as diverse as telecoms operator Telenor and the Hong Kong Jockey Club.
“We built the Hong Kong Jockey Club in Second Life, new branch layouts for banks and have shown how it can be used to train oil tanker drivers and emergency services when responding to forecourt incidents,” Mr Middleton points out.
“We were the first management consulting firm to develop a presence in Second Life. When we started doing that, people said ‘It’s for the birds’. But I said that in 1994 about the internet. Yet within three years, you were dinosaurs if you were not online.
“I’m sure we’ve all made mistakes like that time and time again. If you don’t respond to the opportunities offered by the relentless change, then you’ll struggle.”

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