However, “the largest challenge we were faced with was being willing to try something new,” Keith recalls. “Traditional insurance-based companies struggle with that. Money wasn’t a problem, there was a commitment on this from the board of directors on down. But we did it when the market was down, and stayed the course.”
Today, Keith says he challenges his team to constantly “look at other ideas or ways we could bring new solutions to the marketplace. We see our IT shop as a core competency — the group is empowered.”
Verizon: The New Internal Products Group
When Shaygan Kheradpir became president of e-business at Verizon in 2000, he realized that the traditional model in telecom — where R&D developed products and IT supported the back-office — was breaking down thanks to the Internet.
“It used to be that innovation would get cooked up in an R&D lab and then pushed to the customer,” Kheradpir says, “but that model was beginning to shift dramatically; lots of people with creativity could do stuff they couldn’t do before.”
Today, Kheradpir is Verizon’s CIO, and many of those creative people are on his 10,000-person-plus IT payroll. Although Verizon still has a large R&D department focusing on network infrastructure, the IT team has taken the lead in developing many new customer-facing products that leverage software and the Internet.
“We saw IT coming together with traditional networking, media, and entertainment,” Kheradpir says. “More and more of these products are coming out … MySpace, Second Life. People look at YouTube, for example, and they’re shocked — how did that happen? The customers are changing their habits fast because of connectivity and the power of the software. They expect you to bring innovation to life.”
In 2001, Verizon IT began its product development efforts, leveraging small entrepreneurial teams of developers, strategists, and UI designers who are responsible for pitching their own ideas, then helping take them to market. “Since there was no factory model for this, we said, ‘OK, let’s get in and see what we can do,’ ” Kheradpir recalls. “It’s grown every year.”
IT’s first product was the iobi connectivity suite for consumers and small businesses, which launched in 2003 and married the IP world with the public telephone network, synchronizing caller ID, IM, and address books across multiple platforms. Next came a hybrid consumer device called Verizon One consisting of a telephone, DSL modem, wireless router, and display screen for news and information. More recently, Kheradpir’s IT group has built a VoIP product, and contributed to the development of Verizon’s FiOS fiber optic video initiative and related DVR.
“The foundation of all these products is similar,” Kheradpir explains. “It’s pushing bits around all these different devices without you having to have an IT department in your home.”
Organizationally, Verizon’s IT product people sit side by side with IT teams that develop internal applications and support external products when they are launched (billing, provisioning, and so on). Yet Kheradpir explains that the product folks have “multiple DNA” — they not only understand software, communications, and service quality, but have “really honed their product development skills.”