The McCue Interview: Royal Mail CIO David Burden

It's the day after the England football team's disastrous finish to the Euro 2004 match against France that saw them spectacularly snatch defeat from the jaws of victory, but in his office at the Royal Mail's Old Street headquarters in London, CIO David Burden isn't looking too disappointed. That might be explained by the fact he has a French passport and is originally from Wales, so there's no love lost there. "It's an each-way bet," he jokes.

Burden joined the Royal Mail at the end of 2002. Chairman Allan Leighton coaxed him away from a gap year spent travelling across Australia by train, hiking in New Zealand and living by the beach - where he took part in ocean swimming.

He was picked for the CIO role because of his extensive background in formerly government-owned organisations that had become private companies. The situation at Royal Mail was also pretty acute at the time as record losses of £1.1bn had been announced.

"Having been through two transformational businesses - companies that were government-owned - the issues are very much the same," he says. "It is about how you drive efficiency through a business and how you convince the frontline people it is absolutely necessary to make the change and it is a good thing."

Starting out with a degree in pure mathematics, Burden worked in operations research for a French consulting firm, living in France where he met his wife. He then moved to Canada and into the venture capital business around small technology companies for 10 years. After working for the Canadian government's science and technology advisory board for a year he was headhunted by Air Canada where he oversaw the outsourcing of all its IT to IBM.

In late 1994 the head-hunters called again, this time from Australia's Quantas airlines, which flew him out to woo him.

"They took me on the Manley Ferry in February when it was 25 degrees with all the boats in the harbour," he said. "It was a case of how much I could pay them to work there."

Shortly after he joined the government-owned Quantas, it was privatised in July 1995 and Burden is still proud of his achievements there, which left the airline in a healthier position than many rivals when the bottom fell out of the travel industry after 11 September.

He arrived at the Royal Mail just as it was in the process of undertaking a massive transformation project, which included outsourcing the IT to CSC's Prism alliance. Burden says he was under no illusions about the size of the task facing him and the whole organisation.

"There's no question this is a business under very considerable threat, which is why the renewal programme has been so vital. There's always a bit of difficulty in companies that don't have a long history of being a company," he explains. "People don't understand why you have to be profitable and why £1 a year profit isn't enough. You have to have enough margin and capability to reinvest in the business and to grow it."

Burden admits there are still "mountains to climb" in turning the business around and fighting the threat of internet and email communication and the opening up of postal services to competition, but the Royal Mail is at least now back on the right track with profits of £200m.

To date, Burden's role has largely been centred around slashing IT expenditure – which he has done by "40 to 50 per cent" – but there are still some major projects on the board.

"We've probably gone a little bit too far at the moment [with the cost cutting]. But very often what you have to do is cut back in order to rebuild," he says. "If you go at it too slowly people get quite reluctant to be radical and you really do need to question everything."

A massive automated international mail sorting centre at Heathrow will go fully live in October, though it is delayed and some £70m over budget and Burden hints that it should never even have been started. "If we had properly understood the circumstances I think we might never have started the process but it will be made to work," he says.

Elsewhere there are some more pieces of the SAP finance systems to put together and Burden says the HR systems, which deal with 200,000 employees, remain an "interesting challenge". Siebel is now also up and running in the call centres after a few migration issues.

"Like many customers we had a bit of an issue migrating to Siebel 7 because I don't think anyone grasped the degree to which Siebel 6 and Siebel 7 were different structures and designs," he says. "We migrated last September and we had a couple of fairly difficult months in the call centres while people got used to the new system but it has been running smoothly since then."

Away from slashing costs, Burden's focus is on transforming the Royal Mail into what he calls a "data-based" business. "We can't just go on delivering the mail. Fundamental things are happening and clearly technology plays a big part in that, not just by automating existing processes but by trying to understand what are the things our customers really want and making sure we can deliver them," he says.

During his 18 months at the Royal Mail, Burden has been enjoying rediscovering the attractions of London and the UK, having not lived here for 33 years. He's also an outdoors person who walks the half hour to work from his Islington home, and he's just brought his 41-foot sailing boat over from France.

"I like to sail when I can," he says. "We brought the boat across to Dartmouth a couple of weeks ago and we're gradually working down the west coast. The Irish Sea is the challenge for the end of this month."

In the meantime he'll be hoping the French can make it all the way and retain their European Championship title in Portugal on 4 July – even if it is at England's expense.