Vodafone hits IT jackpot with £410m cost savings

Vodafone’s IT operations have delivered cost savings of £410m since May 2006, according to chef technology officer Steve Pusey.

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Vodafone’s IT operations have delivered cost savings of £410m since May 2006, according to chief technology officer Steve Pusey.

The CTO at the world’s largest mobile phone company said at a briefing today that cost savings from network supply chains and consolidation of datacentres had been achieved ahead of schedule.

"We are ahead of our supply chain agenda and ... now we've moved on and stretched ourselves further. On datacentre consolidation again we achieved the target early," he said.

Pusey manages an operations budget of £6.7 billion and a capital expenditure budget of £4.2 billion.

Key elements of Vodafone’s IT strategy included leveraging scale – introducing one global supply chain team across networks, IT and services, outsourcing and simplification and standardisation, reducing the number of core suppliers and the configurations the business used.

Vodafone’s CTO said the company’s research and development budget was focussed on “harnessing disruptive technologies to enhance our proposition”.

Initiatives include incorporating VoIP within Vodafone networks, partnering with IP companies to broaden service offerings and considering the feasibility of Wimax as part of a 4G proposition.

The company will deliver a fully IP based infrastructure to deliver mobile DSL enterprise services to customers, said Pusey. Vodafone will complete the European roll out of unified IP backbone by the first quarter of the 2009/2010 financial year, he said.

He also highlighted joint work with Verizon in the US and China Mobile to ensure global standards.

Vodafone’s global CIO Albert Hitchcock described the success of outsourcing at the mobile phone giant.

The company outsourced software development and maintenance including billing, CRM and web based systems to IBM and EDS. The move was aimed at overcoming a fragmented structure of 2,500 suppliers and 3,800 external contractors.

The benefits, said Hitchcock include increased efficiency, quality and improved time to market. Some 5,000 full time equivalent jobs have been transferred, with scope for more outsourcing to come.

The company has consolidated 12 data centres to 2 central hubs and 1 satellite operation, ahead of schedule and has delivered £100m of savings.

The second phase of datacentre consolidation involves reduction in online storage growth from more than 50 percent a year to less than 10 percent a year, the increased utilisation of the company’s 10,000 servers, and alignment of architecture and service levels.