The Virgin story began in 1968 with Richard Branson's student magazine and then a mail order record company before the first Virgin record store opened up on London's Oxford Street in 1971. Since then the company has become one of the few genuine global super-brands with over 200 businesses, including the likes of Virgin Atlantic, Virgin Mobile, Virgin trains and Virgin Cola. To find out what role IT plays in all this, Andy McCue caught up with Virgin's group CIO Gareth Lewis.
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Gareth, the entrepreneurial culture at Virgin seems to follow the example set by its famous founder Sir Richard Branson. What are the technology challenges in this fast-paced, risk-taking environment, where you are always starting up businesses from scratch?
Lewis: I think the whole ethos of the place has been set and will always be set for the foreseeable future by Richard. The challenges in terms of getting technology done in that sort of environment are many and various, particularly as Virgin itself is a brand marketing-led company, so technology very often takes second place. Having said that it is absolutely central to a number of the businesses that we have, the airlines being one business and the mobile companies being the other.
And does Sir Richard Branson foster and encourage innovation among his executives and employees?
Lewis: Absolutely, the whole ethos is one of establishing a great business proposition, usually as a challenger to another business that is quite often already in existence and just doing it better -- providing better customer service, providing a better customer experience and underpinning all of that a set of IT systems that [makes it possible].
How challenging is it to drive a culture of innovation across a company that consists of many different and often autonomous business units?
Lewis: It comes in two flavours really. One is getting the business units to work together more effectively and there's no doubt it has been challenging but actually over the last 12 months we have made some very significant strides. Working typically from what I call the bottom-up, [we're working our way though] the standardisation, the homogenisation, the simplification a lot of the computing and datacoms infrastructure. So yes, they are autonomous but for the things that are commodity in nature, and which every one of the major businesses needs, we are standardising piece-by-piece across the various entities and the various group companies.
How do you balance innovation with the push to drive some commonality and standardisation in technology across the different Virgin Group brands?
Lewis: As we develop the model, a lot of the "hygiene computing", as I call it, will over time become standardised. We'll have standard models as today we do. We have standard PCs across the group, we have a standard common datacoms supplier within the UK, we have group-wide deals in all sorts of areas from a procurement perspective, so we're working from the bottom of the model upwards. At the top of the model we allow individual businesses complete and total freedom in terms of what their proposition is and therefore what underlying IT systems they need to have that proposition. So we have two ends of that spectrum really. One where we have uniqueness depending on the proposition in the marketplace and one where we are driving for standardisation where there is little or no differentiation in terms of the underlying IT infrastructure.
You've primarily used India and South Africa for offshore IT and call centre work. What other emerging countries and locations having an impact on these kind of decisions in the future?
Lewis: There is many and varied offshored outsource across the globe and I'm sure you can name them as well as I can. Our original choice of India was really [made] as an IT destination. We then found that for certain call centre activities, and it is a very specific set, that worked very well for us. And we opened up South Africa as an opportunity to provide what we term high-quality voice -- a real engagement with the customer. We found the cultural fit, particularly with the UK and South Africa was excellent and we've exploited that and we'll continue to do so. As for other geographies? We're growing businesses in the US, and we're about to launch in the last quarter of this year some businesses in China. So expect to see geographies that align in terms of offshore outsourcing. So I'd expect some offshore outsourcing in China in the fullness of time, I'd also expect offshore outsourcing to probably support our US businesses in either Mexico, Costa Rica -- possibly the Philippines -- but those decisions are yet to be made. But that's the sort of area we are looking at -- Spanish-speaking.
So what would your advice be to companies looking to outsource some of their IT operations offshore for the first time?
Lewis: "Have a go" I think is probably the key thing. Most people who have taken something offshore never bring it back. This is because, frankly, the outsourcers particularly in India [are a very] mature market -- although there are some of the Eastern European markets coming up very quickly. It's a great experience. They are much, much better than you ever dreamed, and in fact I'd go as far as to say they bring a lot of process discipline that you quite often don't find within UK IT shops, which is a great thing. It allows us to leap a long way forward in some of our businesses. So give it a go but tread carefully. Don't go into any huge long-term deals. Probably work with someone who has either done it before or who can give you some help and guidance along the way. But don't be afraid to experiment, and I don't think you'll regret it.
And finally, what emerging and disruptive technologies will have a big impact on your businesses in the future?
Lewis: You've got to look to some of the models, in terms of business models, that people like Google have brought to the table. I think that's an extraordinary phenomena over the last five years. So that's one dimension -- the way you can create communities of interest around different things and actually have the ability to go out and search the Web and pull things back that are relevant to very specific criteria. That's a massive change, and I think you're going to see the impact of that in our businesses. So that's one dimension. There's also the dimension in terms of some of the technology -- the base technology infrastructure -- which will have a dramatic impact on some of our mobile businesses. I'm talking about Wi-Fi Mesh and WiMAX technologies. That has the capability of fundamentally changing the way we deliver content and services to our mobile users both in existing businesses and some of the new businesses that we're looking at establishing. So those two things are the key determinants of how we are going to use those discontinuities in the way people have applied technology to some of our business ideas.
Gareth Lewis, thank you.
Lewis: Thank you, Andy -- it's been a pleasure.
