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Globalized IT operations pay off

July 16, 2012 06:00 AM ET

Equifax executives realized this was possible because 80% of what the business units do is the same regardless of the country in which each operates. Now, Webb says, new product introductions take days or weeks instead of months. "We are in the data manufacturing business," he says. "It's about speed to revenue and speed to market."

But Webb says globalizing IT operations is also about total cost of ownership and economies of scale. "I don't want local countries negotiating with different [service providers]. We may be a small player in one locality, but when you roll that up, we are a large player. It's all about pricing at the end of the day," he says.

Controlling the urge to customize development is essential, says P&G's Fortner. "Our partners would love to create custom code for everything," he says, so P&G sets expectations with partners up front. "We want frugal innovation at one-third of the cost, with a much faster time to implementation, and following application standards across the enterprise," he says. Custom code is allowed only when it creates a competitive advantage.

But not everything that should be consolidated can be consolidated; sometimes regulatory requirements, contractual issues or other hurdles get in the way. For example, many of Equifax's customers have contracts stating that their data must stay in their home countries. That puts limits on what Equifax can do with the data. "We could have gone out and renegotiated, but the business didn't want to do that," Webb says. Instead, Equifax will wait and make changes when it's time to renew contracts.

Webb also cautions about "lift and shift" consolidations of data centers as the first step toward globalization. Most of the efficiencies realized by doing that could be achieved through careful use of vendors and remote monitoring and management, he says. The consolidation should come only after application portfolios have been rationalized and business processes have been streamlined. "This is the one model that makes sense," he says.

Biting Off Big Change

At Bank of America, global technology and operations executive Catherine Bessant succeeded by setting big goals. The $94.4 billion bank does business in more than 100 countries. Bessant says her organization, which works out of the bank's Charlotte, N.C., headquarters, is about 80% of the way through a multiyear IT globalization effort. The bank consolidated 10 of its 55 data centers in 2010 and expects to retire another nine, plus 50% of its applications, by 2014.

Bessant didn't get this far by being timid. "Exceptions and incremental steps are barriers to this. If you go incremental, you don't get it done," she says. Bessant acknowledges that her team's goal of reducing applications by 50% "set people's hair on end," but she says that specifically hitting that target isn't important; it's OK if the final figure is 40% or 60% -- as long as it doesn't end up at 5%. "People need to understand the order of magnitude of change you're after," she says.



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