Kaz founder, Peter Kazacos, has relinquished daily control of the services company to former head of Telstra Solution Services, Mike Foster. The two had been operating as joint CEO since November.
In the most significant reshuffle since Telstra paid $333 million for the Kaz Group in April last year, Rob Roe has also replaced Andrew Richardson as (TITLE) of Kaz Technology Services.
Roe will head up an expanded Technology Services portfolio including systems integration, application development and education.
According to a staff message from the managing director of Telstra's Business and Government Group, David Thodey, Kazacos will stay on as executive director. He will be responsible for solutions, innovation, marketing and strategy.
Kazacos first declared his intention to take a back seat in June 2003, but reversed his decision three months later after a fruitless search for a suitable replacement.
Senior services analyst at IDC, Phillip Allen, warned the decision to replace Kazacos with a Telstra executive could be viewed negatively by customers.
The founder was synonymous with the Kaz brand, Allen said, and the company had established a strong cultural identity that differentiated it from multinational competitors like IBM, CSC and EDS.
"Executive changes impact culture and create questions in the minds of people internally and externally," he said. "For some customers, this could be perceived as Telstra eating Kaz."
Company spokesperson, Kevin Ryder, said the announcements were part of a planned strategy. Kaz would continue to promote its brand and operate separately from Telstra, he said.
Kaz Business Services, which includes business process outsourcing and managed services, will continue to be run by Darren Summerville. He and Roe will report to Foster.
When Kaz was sold to Telstra, the combined services division became the largest Australian-owned ICT company, employing 4200 people. Gaining the financial backing of Telstra was seen as a way of helping Kaz compete more successfully with its larger multinational competitors.
According to IDC, Kaz is in a good position to benefit from the current trend of selective outsourcing to multiple service providers.
The analyst firm estimated the Australian outsourcing market to be worth $11.3 billion in 2004, with a compound annual growth rate of 6.8 per cent that would take it to $14.6 billion by 2008.