Why the global Dell/Philips desktop deal didn't work

Philips, the electronics giant based in the Netherlands, has canceled its $700-million desktop deal with Dell. Why? Because the effort to create a "centralized desktop environment for Philips employees around the world" -- a one-size-fits-all, HQ-mandated approach -- just didn't work. My hunch is that they got a lot of push-back from the regional offices. This is a common problem. In fact, it's covered in Computerworld's new special report on IT globalization. The article about Balancing Global Governance is directly on-point:

As more companies expand offices, distribution centers and manufacturing facilities abroad, IT executives are faced with the challenge and frustration of getting all employees around the world to do things the same way -- from IT to business staffers. Long-standing regional practices, executive politics and a lack of clarity about what the business is trying to accomplish are major roadblocks, according to Gartner Inc. analyst Susan Dallas, who says that about 60% of companies fail to create effective governance. Too often, "senior management will say they want to be one company with one product line and synergy across the group. But they want local autonomy, too," Dallas explains. "They give no clear direction on what should be local, regional and centralized."

The essential challenge is to figure out how much control HQ should have over IT standards and how much to leave the local offices. There isn't a single answer that fits every company. But it's a question that always has to be asked and answered -- especially before signing a $700-million contract!



Global CIOs: Take everything IT does, then add exponential complexity.


Copyright © 2006 IDG Communications, Inc.

Shop Tech Products at Amazon