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Sooraj Shah

Contributing Editor

Sooraj Shah is Contributing Editor of New Statesman Tech with a focus on C-level IT leader interviews. He is also a freelance technology journalist.

Why Tata Steel outsourced to four key suppliers for its digital transformation

After working up the ladder at Tata Steel Europe, Nicholas Reeks became director of IT within the solutions group back in March 2002, meaning he was a member of the IT management team, covering all IT needs from sales to corporate functions, and operations to manufacturing. His role, which included responsibilities for reviewing projects and strategic roadmaps, thought leadership for the exploitation of IT and managing 12 direct reports and a wider team of 200, shifted in 2016, when the company took the decision to outsource IT activities.

It was back then that Tata Steel established a series of five-year contracts with IBM, TCS, Vodafone and Capgemini, to be the primary service providers for all of its IT covering infrastructure, network, desktop, workplace, application support, voice, SIEM services and the application development project areas.

Reeks is now in the role of director of IT, vendor management at Tata Steel, and so he has to manage all of these contracts and the associated operational activities.

“So I get involved in: what our roadmap is; the development for operational IT capabilities; what technologies we’re going to deploy; how we’re going to provide a service capability to our users; what is the workplace going to look like as we move towards Windows 10; and how do we move from a standard data centre to cloud capabilities,” he tells NS Tech.

A big challenge for Tata Steel was to work with multiple partners, who would be the primary interactions, but wouldn’t be the only vendors involved as the company still relies heavily on Microsoft, SAP, Oracle, Ariba and others.

“So we worked quite hard to understand what the governance process was going to look like, we set up service reviews with the vendors, and we ensured we had the right level of business interaction where appropriate, how we selected the skills and how do we move to new technologies,” he says.

“The primary issue in the early days of outsourcing was to ensure the knowledge transfer and how to protect the knowledge for legacy systems. We run a very varied estate, we have certain applications running on [Microsoft] Azure, but we also have other applications running on mainframes that were written back in the late 80s or early 90s – so it was important for us that we could find a way to work with the partners that we had good capabilities, and that they could work amongst themselves,” he adds.

Key to this was establishing a service integration and management (SIAM) capability for the first time – and having the ability to try and look end-to-end when the company has incidents, requests, problems, changes, as well as making sure it has good strong ITIL processes.

Reeks admits that like any outsourcing projects, Tata Steel has had a number of issues contend with in the early days, but he says that over the last six to nine months, particularly around the ServiceNow platform with support from TCS, the company has managed to bring the number of incidents down.

“We feel like the discussion with end users is now more focused on the digital transformation projects we execute rather than ‘where is my laptop’,” he states.

The decision to outsource the company’s IT comes at a time when many businesses and governments are insourcing – because of a perceived lack of control over technology projects and budgets.

Reeks says the primary driver for Tata Steel was about standardisation and modernisation, as well as managing its budget.

“Essentially, we started to look at a situation where we had a workforce of around 600, how we were going to manage a pipeline of talent development and skills acquisition to replace a team of people that were increasingly going to be coming up with retirement, so with that kind of scale we looked at our options for change processes and the outsourcing option for us was suitable,” he explains.

As Tata Steel uses a large portion of packaged applications through SAP, has a large number of legacy apps on the mainframe, and is working with a company called PSI to develop new software for its scheduling control barriers, it means that the company isn’t developing software in-house, and therefore unlike many businesses that are switching to using DevOps, Reeks says it made more sense to go out to the market to find the relevant support services that the business needed.

However, while the company is outsourcing much of its IT, it is shifting to using more internal skills for its data and analytics capabilities than the traditional outsourcing model that it established in 2016.

“In that context, we want to build skills ourselves, although it’s hard to find skills you want,” he says.

Tata Steel’s overall vision is to digitally transform, and there are several key drivers for this.

“The primary driver is about where we can use more of the digital tools with our customer base to interact with them, and alongside that is the Manufacturing 4.0 side of things which incorporates the likes of drones and sensors for monitoring and maintenance,” he says.