All is not well at Telstra’s Kaz division, as our man on the inside explains


First subscriber email February 16


The Fin Review had a story yesterday about some management changes at Telstra’s Kaz computer division but only really touched the surface of what is a major shake-up.

The paper was on the money in reporting that company founder Peter Kazacos has been side-lined.

However, what about these three very high profile and senior departures last Friday, the day after Telstra’s results announcement?

  • Michael O’Sullivan: executive director commercial and second in charge. Gone.
  • Andrew Richardson: managing director Kaz technical services, the biggest division. Gone.
  • David Knox: managing director Kaz Asia, the growth unit. Gone.

Crikey had previously heard that Telstra might be looking to spin off its Kaz technical services division but now it might only be the Kaz superannuation division that is on the chopping block.

The appointment of Mike Foster as the sole CEO of the whole operation suggests Telstra is actually further embedding the Kaz technical services division into the broader Telstra bureaucracy and any residual Kaz autonomy is now long gone.

Telstra vs NAB – two giants at war

Second subscriber email February 16

An expert on the IT game at the big end of town writes:

Hello Crikey, regarding your Kaz clean out story from this morning, that is not the half of what’s going on at Telstra!

In the managed services business Telstra has big customers like Qantas, NAB and Woolworths. NAB has been fighting the “no can do” management team in Telstra Business and Government for the past 3 years.

You see, Telstra were contracted to upgrade some of the key systems and infrastructure that are relied on to run the outsourced computing side of the business. However, the NAB desktop component has incurred big losses for Telstra as no due diligence was performed before they took the business on! (NAB also did a sterling job on the commercial negotiations and tied Telstra up in contract with no way out of fixing their mess).

Since discovering this, Telstra management have spent the absolute minimum on upgrading equipment in an attempt to recover losses. NAB is still running Windows NT 4 – totally unsupported within the industry. NAB is cutting backroom deals with vendors to keep purchasing old equipment as new computers no longer run Windows NT4.

NAB are now at the end of their patience as Telstra keeps telling them everything will be “taken care of”. To avoid fulfilling this obligation, Telstra continually shuffles the executive management team for outsourcing. The latest being Rob Roe, former salesman, who has been in the executive manager’s job for just over 12 months. Like any salesman, Rob likes to make big promises. Now, he’s being “shuffled” into Kaz as a Business Development Manager.

Meanwhile, key people in the executive management team have lost confidence and departed. The management team is in an absolute mess with commercial costs blowing out, a record backlog of disputes with NAB commercials, unbudgeted headcount and failing equipment no longer under warranty or support.

Watch this space for big changes at Telstra. Keep watching for more big changes at NAB as they prepare to pull their business from Telstra.