A local power failure has left Dr Richard Sykes temporarily without electricity at his home in Islington, London. He is also being photographed to illustrate this article but the double delay in being able to talk to him affords a little time for admiring his collection of modern art and perusing his bookshelves, groaning under the weight of volumes that testify to the interests that have underpinned his career.

There are the books about Japanese business which serve as a reminder of Sykes’s days in that country for ICI, and some on outsourcing, a trend he helped to vindicate in his days in the early 1990s as group vice president of IT at the chemicals giant. There are also many more on general business management by Charles Handy, Peter Drucker, Tom Peters and the like that underline his abiding insistence – common enough now but somewhat rebellious at the time – that IT must align itself with business.

When the photographer’s time is up and Sykes is finally ready to speak, he is, as ever, charming company with a rich fund of anecdotes and wry thoughts on the occasional absurdities of the IT industry, recalling how he returned home from Japan where he had been general manager of ICI Films in Asia, to step into IT for the first time, after 20 years on the commercial side of ICI.

Career challenge
“I got pulled into the IT job in 1993 [at the age of 47] and what had happened at ICI was that IT had grown up in the individual business units in two very different schools,” he says. “In manufacturing it was Digital and on the accounting side they were with IBM. The late John Harvey-Jones [later to become known for the Troubleshooter TV series] had seen this was leading to a tremendous duplication so in 1983, he had created a corporate IT department. What I inherited was a very strong corporate structure of 1,300 people. We had mainframe computing and telecoms, where we had to get leased capacity from European telecoms incumbents and create private networks. That had given ICI a global network and consolidation to a few datacentres with very good economics. The downside was that people had become arrogant and had decided they knew what to do next. The result was they built a £12m datacentre in the north-east of England that closed because there wasn’t the business to justify it. It’s now a library and archive store. IT had become a centralised monopoly power. So management said, ‘Hang on a second, something’s gone wrong here. Come to head office and take over this role.’”

Early on in the job, Sykes realised that there were two distinct views of how well IT was operating at ICI.

“I was taken by my new team to visit IBM, Digital and BT, and everyone said what a great operation we had. Then I met the business unit CEOs at ICI and they said, ‘Line them up – there’s the machine gun. They have this monopoly power and they don’t listen to us.’”

How Sykes fixed the problem through outsourcing and managed his way through the demerger of pharmaceuticals wing Zeneca and the merger with Unilever’s speciality chemicals businesses while reducing core headcount to a team of just 30 has made him a regular on the speaker circuit. He is also an acknowledged expert on how firms should handle outsourcing and on the role of IT in M&A. As well as that hard-won experience, part of Sykes’s appeal lies in his robust, no-nonsense views and willingness to challenge conventional wisdom and standard practices.

He recounts the story of how, in one outsourcing agreement, he did not renew the arrangement after the term of the deal was complete.

Heart of the matter
“I heard that the chief executive [of the outsourcer] was beating up his team on having failed to win the renewal. I invited him to dinner and said that in the three years with us they had changed strategy from being low-cost and fast-moving to having significant overheads and, therefore, they no longer had alignment with what I wanted.

“So I told him, it’s not your team’s fault, it’s your fault. I got a nice letter from him later saying he would never beat up his team in that way again. In outsourcing, a CIO has to have a strong understanding of alignment with partners. If it’s not there, tell them, warn them, debate it and do something about it.”

Sykes also used a good trick when it came to negotiating with an outsourcing partner, drafting in a merger-and-acquisition specialist to help do the deal and dispensing with the usual request-for-information (RFI) element of the process.

“Usually, you did an RFI, got a large number of replies to get a shortlist and then did an RFP – a request for proposal,” he says. “We never once did an RFI but we did our own market research to get down to three or four players. That way, we were more likely to get a strategic fit. Our opening line was ‘We‘ve saved you an RFI and we have a business proposition...’ We always wanted a market-based understanding rather than having the classic situation where the outsourcer shifts and changes and does everything to win the deal because the company they work for has this deal-making culture.”