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By Andy McCue, 21 September 2007 10:36

INTERVIEW

It's a time of transition again at the AA. Just four years after a private equity buyout and separation from its then parent company, Centrica, the motoring organisation is putting the finishing touches to a £6.2bn merger with Saga, which has just been given the official green light by competition regulators in Brussels.

That transition is not just for the AA but for the company's IT director Trevor Didcock - shortly after our chat in his office at the AA's Basingstoke headquarters Didcock left the organisation as the Saga management team took control.

He's clearly aware that he'll soon be looking for another CIO role as we talk and he reflects on the excitement and achievements during these past four years with the AA, revolving around a private equity buyout and separation from its previous parent company Centrica.

Didcock joined the AA's executive management team in 2003 from rival motoring group the RAC - "swapping from orange blood to yellow" as he describes it - where his first major challenge was building a complete new IT infrastructure and slashing operating costs, all in a 12-month handover period during the separation from Centrica. The AA up to then had shared Centrica's IT operations.

"Our job was to ensure that Centrica didn't make too much money from us as we separated, make sure we had a secure and stable infrastructure once we'd finished but to leave as much cost as possible behind us and cut the costs," he says.

Not surprisingly, faced with such a tight and immovable 12-month timescale, building everything from scratch wasn't an option and the AA entered into a number of strategic outsourcing contracts.

That strategy led to a £50m seven-year infrastructure deal with IBM, an application support contract with Fujitsu Services and a £10m networking contract with Cable & Wireless. The IBM deal has just been terminated as part of the Saga merger but more of that later.

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Three years later the results speak for themselves. IT costs have been slashed by 40 per cent from about £56m per year to £33m per year through a combination of rationalising platforms, applications and servers - the AA has gone from about 700 servers under Centrica to 250 today. The internal IT headcount has also been cut from 300 under Centrica to just 120 but it has also been a period of unprecedented new investment in IT - almost double historic levels, at more than £100m.

One of the keys to this was the due diligence and working out exactly what IT assets the AA had and what they all cost, explains Didcock.

"That's a hell of a challenge. I've not worked in an organisation in the past that has really understood its asset base, what contracts it has, its licensing position - accurately. We did a massive job of chronicling exactly what we've got right down to the individual penny," he says.

This manifested itself in what Didcock calls a "massive multi-dimensional spreadsheet" called a service map.

"We know financially what everything costs and we can have really good discussions with the end users - how much are you prepared to pay for it, do you want us to cut it, do you want us to change the hours of service? And we can have those completely informed debates knowing to the penny what every system costs, what every piece of infrastructure costs, what every site costs to run," he says.

Now the AA has a PC user base of about 5,000 staff, plus 2,800 ruggedised patrol laptops for the breakdown vehicles, and the AA's roadside operation is actually incredibly automated.

Breakdown calls either go into one of the AA's physical call centres or to a remote teleworker. The company has about 300 of these teleworkers across the roadside and insurance business, who have a dedicated workstation at home connected to the AA's systems.

The system automatically assigns the breakdown to the nearest available patrol driver's mobile data terminal over GPRS, using SMS text messaging to their mobile phones as a back-up. It can even identify the location of the motorist by triangulating their mobile phone signal if they don't know where they are.

The patrol drivers have GPS satellite navigation devices in their cabs and the system automatically plots their route to the motorist. The patrol drivers all carry the AA's own Vixen laptops, which can be plugged into a vehicle to diagnose the fault using a knowledge-base containing all known vehicle faults from the car manufactures and the AA's own experience.

"We've tried to automate our businesses as much as we possibly can," explains Didcock.

He uses the increased investment to dismiss the argument that private equity is all about asset-stripping and cost-cutting.

"We needed to take cost out but we also needed to get the business growing again and you only do that through investment so we've had the biggest IT investment in the history of the company and the biggest level of marketing spend in the history of the company," he says.

Click here to read page 2 of the interview.