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Q&A: Northrop Grumman CIO talks about IT acquisitions, consolidations

Tom Shelman weighs in on the fine art of IT integration after corporate buyouts

By Todd R. Weiss
March 11, 2004 12:00 PM ET

Computerworld - PALM DESERT, Calif. -- Over the past several years, Los Angeles-based defense contractor Northrop Grumman Corp. has made several key business acquisitions, including Litton Industries Inc. in 2001 and TRW Inc. in 2002, expanding its business reach and revenues. Making those acquisitions work by combining IT departments and systems has become an important part of CIO Tom Shelman's responsibilities.
Reporter Todd R. Weiss caught up with Shelman at Computerworld's Premier 100 IT Leaders Conference here this week to find out more about how Grumman has made a science of IT acquisitions.
When Northrop Grumman proposes an acquisition of another company, how early in the process are you brought in? Very early, but only on the big ones, like when we bought TRW and Litton. Some of the acquisitions are done because you can get some [business] synergy with decreased costs. Some have been strategic to drive revenues in certain areas.
How do you successfully use IT to help build revenue for the company? We already know at what levels we will address ... the infrastructure.
So you plan growing revenue as part of the strategy for the IT acquisition of a target company? It's not traditionally how we do it. Our maturity about it grew as we made acquisitions. In the past, it took us years to decide what e-mail systems to use. We learned from that. We learned that and applied [improved] processes to all future integrations. Before the TRW acquisition ... typically the best case ... would have been two years to have everything [and new personnel] integrated. We took TRW and integrated it in a little bit less than a year. We made a process out of the whole integration from an IT perspective. If we had acquired something like that 10 years ago, we would have choked on it. We wouldn't even have known what questions to ask.
So it's easier today to combine IT systems and departments after acquisitions because of your past experiences? We have a template. We have a checklist we go through. We ask, 'What kind of network do they have? What kind of security do they have? What kinds of ERP systems?' There's a whole list we go through.
I would feel comfortable taking any acquisition or any integration today and doing it.
Are others copying your success at making these acquisitions work? We do have customers using us as a model. I've had CIOs call and say, 'We're doing the same thing. Can you help?' You've got to have support from the corporate CEO for the model.We're not a company of Northrop Grumman executives. We're a collection of Northrop Grumman immigrants.

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