Globalized IT operations pay off

By interlocking business services, companies gain customer knowledge, efficiency and speed. The payoffs are huge, but laying the groundwork for IT standardization is no easy task.

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At P&G, the goal is to innovate faster in order to compete in an industry where the speed to market for new products is accelerating. The business services, ranging from strategic sourcing to product innovation, "have dramatically compressed our time to market," Passerini says.

Similar efforts are under way at The Vanguard Group, Bank of America and Equifax. Here's what IT executives at those companies have to say about building -- and selling -- a global IT services operation.

Centralize, Optimize, Innovate

IDEX, which is headquartered in Lake Forest, Ill., and does business in 80 countries, started by consolidating its global IT infrastructure and core ERP applications into a private cloud. But the real value came from building within that cloud common sets of shared application services called platforms, which business units that sell into the same markets can use collaboratively to provide more comprehensive offerings to their joint customers. For example, several lines of business sell components that go into subassemblies used by manufacturers of healthcare diagnostics equipment. "Now we're talking about a system rather than individual component sales," says Kamath.

"We gained cost efficiencies through a shared services function, but that pales in comparison to the opportunity we have to innovate and capture additional market share in new geographies and markets," he says.

The shared services platform at IDEX evolved in several stages. Kamath says the company started by creating a consolidated global enterprise IT infrastructure based on a private cloud. Next, it deployed a unified suite of core enterprise applications before layering on the platforms, which handle functions such as sales and marketing. For the latter, IDEX deployed a multitenant implementation of Microsoft Dynamics CRM.

The configuration offers the efficiencies of a shared infrastructure while providing each group of companies with its own collaborative work environment. "This gave them the ability to present the collective capabilities of our companies to our channels," Kamath says.

Meanwhile, the IT team worked with the business to standardize business practices. "We standardized everything from the business processes to how we look at the data," he says.

A Shift to Innovation

P&G took a different approach. It started by consolidating its data centers, creating a robust global network and centralizing around a single global instance of its SAP ERP software. "You can't standardize without centralizing first," says Passerini.

The IT group then outsourced the hosting and management of that infrastructure and began focusing on optimizing and consolidating its business processes. "That changed the whole focus from 70% running the operations to 70% innovating on the operations," says Jim Fortner, vice president of IT development operations at P&G.

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