Case study: Interim IT Programme Director at Micro Focus
Paul Wright, Head of the Technology Practice at Odgers Interim, speaks to Chris Harden about his recent assignment leading a technology separation programme at Micro Focus international plc for their largest ever asset sale
Micro Focus International plc (MFI) is a leading, global infrastructure software company. The $2 billion group is both the seventh largest software company in the world and the largest technology company listed on the FTSE. The company has tripled in size in the recent years by acquiring a number of technology businesses including HPE Software. In July 2018, MFI announced its first major disposal - the sale of the open–source software provider SUSE to private equity firm EQT Partners for an enterprise value of $2.5 billion. EQT plan to grow the company as an independent business.
The sale of SUSE required an extensive carve-out programme to be created involving some 20+ multi-disciplinary workstreams across various geographies. The IT workstream was at the hub of the programme with all other workstreams having major dependencies on it for their success.
The buyer, EQT, did not have their own existing IT solution capable of running the SUSE business and so needed to develop their own system which would clearly take some time. However, in order for the deal to complete in a timely fashion and not wait for the new system to be developed, Microfocus agreed to make changes to their own internal systems to enable SUSE to operate as an independent business, while sharing the broader Micro Focus environment
The scope of the IT programme therefore involved separating the existing IT systems, creating a number of detailed Transition Service Agreements (TSA’s) and developing a migration plan which outlined how data and services would be transitioned from the Microfocus systems to the newly built EQT system when it was ready.
Micro Focus turned to Odgers Interim to find an interim IT programme director that could successfully manage the IT carve-out from the company.
The IT programme required a heavy-weight IT programme director to manage and lead a globally distributed team of project and programme managers, internal technology specialists and third-party consultancies to deliver the separation activities. The development of the TSA’s and the Migration plan involved close liaison with lawyers representing both Microfocus and SUSE and with the IT programme being at the hub of everything, excellent stakeholder management and communication skills were required to liaise across both Microfocus and SUSE management and executive teams.
The deadline for the deal to be completed was March 2019, giving only seven months for the delivery of the programme; the CEO, Stephen Murdoch said, “this was a highly-challenging timeframe for a transaction of this type”.
Chris Harden was engaged as interim IT programme director. He is a highly experienced programme director with a first-class track record delivering large-scale IT-enabled change programmes for blue-chip companies. Recent clients include nPower, Royal Mail, Shell and Thames Water. Previously, Chris was a partner running the global systems implementation practice for PA Consulting. He is thus well versed in dealing with challenging programmes and senior stakeholder scenarios.
Chris’s first task was to hire programme leads to build a strong management team to manage and run the portfolio of projects.
The critical path was clearly going to be the technical workstream which had to ensure that users could only access data across the application stack that was appropriate to their company. With some 300 applications being used by SUSE, it would be nigh on impossible to recreate a physically separated environment in the target timescale. Alongside the Executive teams of both companies, Chris led the development of a set of separation principles to identify application candidates. These principles were then shared with the overall programme management, other workstreams and business leads to gain buy in to both an understanding of the issue and how to resolve it. This resulted in a more manageable, albeit still very challenging subset of 50 applications that had to be separated. Chris commented, “managing scope was always a key challenge throughout the programme with other workstreams wanting to add more applications to the scope, but continual referral and strict adherence to the previously agreed principles helped manage the issues that arose”.
It also became apparent that despite the way Microfocus IT had evolved over the years and operated, now was not the time to change the way it worked if the timescale was to be met. With multiple third parties involved in the programme wanting to modify internal processes and introduce new tools for management reporting, Chris realised that the timescale would be compromised if new change was imposed. Chris said “the separation team was under enough pressure to deliver without making things more difficult for them through introducing new working practices and tools and so anything we could do to relieve the pressure on them was most welcome – it just meant the management team had to work a bit harder to collate information to report up the line.”
That said, one change that did have to be implemented was a mindset shift as MFI IT became a service provider for SUSE. MFI IT had offered an excellent service to its business communities over the years, but a change from an internal service provision to a commercial arrangement was a new challenge. Utilising his management consultancy background, Chris and the management team implemented changes to internal processes to facilitate the new transitional service agreements and also went and met with the development/support teams around the world to outline how the relationship with SUSE would change and what it meant for them. Chris said “the introduction of formal processes and the change to the working relationship with familiar business colleagues was a brand new way of working for some people – gone were the days of informal ‘favours’ and in came new formal agreements”.
As the interim IT programme director, Chris also led the development of these formal agreements (or Transition Service Agreements as they are more commonly known) working in conjunction with Deloitte and third-party legal support. The TSA’s detailed the services that MFI IT will provide to SUSE during the transition period when SUSE operate on the MFI IT systems whilst they develop their own systems.
Despite a highly constrained timeline and hugely complex programme, Chris led the team he recruited to deliver the necessary carve out on schedule and well within budget. SUSE was able to operate outside of Micro Focus and be an independent business on time as required.
Chris’s work was rewarded with an extraordinary bonus. In a letter in April 2019 detailing the award Stephen Murdoch, CEO of MFI wrote: “The last 10 months have delivered a huge amount of change within our organisation and the disposal of SUSE has required huge diligence in order to deliver on time and within budget. I would like to thank Chris for his hard work and determination in making this happen.”
For more information please contact Paul Wright.