One World IT
- Article 13 of 77
- Information Age, July 2001
Managing an IT infrastructure on a global scale can be a nightmare – as many CIOs will testify
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For most IT directors, managing one office's infrastructure is enough of a challenge. Managing distributed sites is even harder. But when an organisation's operations are truly global, the complexity of its infrastructure multiplies by an order of magnitude. And while there are often economies of scale to be gained by implementing the same systems on a worldwide basis, bigger also means more complex, as enterprise-wide systems, such as enterprise resource planning (ERP) packages, are extended to users across the globe.
Globalisation of the IT infrastructure used to mean setting up a wide area network (WAN), but since the Internet has played an increasingly important role in IT implementations, the opportunities for expansion and integration of systems in disparate offices has never been greater. And with the introduction ofweb-based applications, where the only prerequisite for access is a browser, even desktop applications can be run from a single server, provided appropriate security, such as a virtual private network, is put in place.
It may not be all that simple, however. According to Martha Bennett, vice president of research at analysis firm Giga Information Group, “It's not a case of deciding whether you should have the server in London or Houston - you have to look at the business and see where its processes start and end.”
Irfon Watkins, managing director of business process integration company CommerceQuest, agrees. “Although building a global IT infrastructure presents a complex [technical] challenge, many of the key issues in building a global trading environment are not technology related. ClOs constructing global IT strategies must identity and overcome these.”
Nevertheless, any company that is global needs to integrate at least some of its basic systems or face innumerable problems. Says Stephen Luczo, CEO of storage equipment vendor Seagate Technology, which has around 20 offices worldwide: “We used to have drives shipped from Asia that would arrive in Holland before the IT systems registered they'd been sent. We lost data. We even had a terminology for these breakdowns, where we'd have to put in another transaction to replace the original. We called it 'retriggering'.”
INTEGRATION OR DUPLICATION
Companies that fail to integrate important back office systems risk duplication of effort and resources as well as providing too little information for separate offices to work together effectively. But, as Bennett of the Giga Group points out, the level of integration can vary between companies because of their differing requirements.
To integrate the company's disparate systems, Seagate installed common software and hardware platforms in its offices and unified them internally and across the Internet using a web-based infrastructure. “It's critical to deploy platforms that can be leveraged across the web architecture and be used for storage, networking, information management and application management - using a common interface and real-time messaging,” says Luczo. “If you're running a company now, you absolutely have to have a web-based infrastructure. You can't afford to do global conversions if you're not using an architecture that's leveragable. It's dramatically improved Seagate's ability to run its business. Our development expenses are lower, we can convert systems more easily and hook up diverse applications with each other much faster.”
But the resources for such a project are not always available to every IT department. Harriet Edelman, CIO of US cosmetics firm Avon, saw the need to revamp the company's entire IT structure to achieve greater efficiencies. However, with 3 million direct sales representatives in 135 countries and 17 manufacturing facilities around the world, the cost of true global integration was going to be high - $120 million. “We cut down on the needs associated with project delivery,” admits Edelman. “The original plans were too ambitious.” Building a global ERP system for manufacturers and a web-interface for direct salespeople became priorities, rather than full-blown integration of every single business process in the organisation.
Integration does not necessarily mean centralisation, however. “Too much centralised control does not work,” says Giga's Bennett. “I'd advise a central strategy with local execution. For example, software tools and hardware should be chosen and sourced centrally, but deployed locally. Larger companies tend to go for a big I global services provider as an 'overnet' and then Ben Salama, Unibase local companies for ”Even if the content is services such as produced and hosted local office conneccentrally, the sub- tivity. The best sidiaries need to be performing organiinvolved.“ sations manage the strategy centrally but tend to leave the execution and implementation to the local departments.”
Paul Burfitt, Global CIO at pharmaceutical company AstraZeneca, has followed this advice. “You need to have one organisation in one company, centrally based, running things. But people at the local level need to put together their own plans. That shouldn't be done centrally - far from it. We have some global integration projects. Our infrastructure is based on Microsoft, our ERP system is SAP, but we're rationalising our applications based on functionality or whether they are nationally based. We're keeping a mix of the two.”
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