The right level of IT centralisation and commonality can mean huge savings and new opportunities for global companies. Employment services group Manpower sees effective communication as the key to unlock the benefits
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The perpetual challenge for globalising IT is to get the benefits of centralisation without losing local flexibility. This is what Dan Greer, director of information systems governance at global employment services company Manpower believes his organisation has achieved.
Manpower has 4,300 offices, operates in 67 countries and has between 1,500 and 2,000 people working in IT. Until two years ago, says Greer, "every country was totally independent with its own IT and its own applications. Now we are bringing IT together."
The driver to do so was clear and familiar. "Our executives had no visibility into IT spend, which is a significant percentage of our total corporate spend. They did not know what IT was doing," says Greer.
What the company wanted was "a set of common concepts, deliverables, tools and processes so we could all work the same way - we called this the Manpower way," he says.
"We wanted to be able to spend better on IT, rather than spending out of control. Each country's business is different, but if they do something similar, we wanted to leverage that similarity. For example, if four countries need a new finance system, it would be nice to only have to buy one. We always ask, 'How much diversity is unnecessary?' So we mapped out all the business processes across Manpower and divided them into three categories: shared, common or unique."
The processes in detail are:
- Shared processes: identical in every country so they can be done with an identical system.
- Common processes: very similar in every country but with some local differences, so a common but customisable system is best. Typical in this category is customer relationship management
- Unique processes: these are processes unique to only one or some countries but critical to local market share, and therefore need individual point systems.
The most prevalent type of process is in the common category. Greer says that only a few of Manpower's applications can be shared because its business is at different points of maturity in different countries, which affects the way it uses IT.
"It is important that as a new branch starts up that we give it complete independence to go as fast as it can to gain market share. When it matures we need to leverage these efficiencies [globally]," says Greer. "At start-up, IT spending will be high as there is a lot of build and implementation. As it matures, the spend will reduce as IT goes into maintenance and enhancement."
In Europe, Manpower's business is already mature. "There is an abundance of common systems which are 90% the same, but the last 10% variance has to be retained to give that country a unique competitive advantage or it would lose business," says Greer.
"In Nordic countries, for example, we have to run a job posting website because we have to compete against another company that also has one. This firm does not operate in southern Europe, where we do not need a job posting site.
"Although we have to make some differences, there has to be a legitimate need. We push really hard to squeeze the gap so that systems become more and more common and customise only 10% or even 5%."
Sometimes customisation is required for different legislative environments. "In the Netherlands we send jobs to temps on their mobile phones and this process is integrated into our web application," says Greer. "In France we could not do that as the work contract process is less fluid."
Manpower also ensures that unique systems can, as commercially necessary, become common systems. "We are learning from each country. The Netherlands has a CV extraction system which we are building as a global product. There is a lot of local development that can be leveraged."
Even where systems are disparate, they can be run from one IT centre. "The customer relationship management systems we use to find temps may be different in different countries depending on how the market works. For example, in Europe, unlike the US, we need walk-in high street offices, but the systems can still be hosted on the same server," says Greer.
So how much IT centralisation has Manpower achieved? "There is a lot of commonality in our IT now, and over time our IT will become increasingly alike across countries. As old applications die off, we move to common systems. All countries have their own systems development, operations and desktop support, but it is all done in a common way. We are also sharing knowledge between countries. For example, Belgium is adopting the mobile phone contacts system this year," says Greer.
Key to the successful centralisation of IT has been the creation of a global IT organisation headed by global chief information officer Rick Davidson. He works with the support of a chief development officer, a chief technology officer and a director of IS governance.
However, getting the relationship right between global IT, local IT, local business management and global business management is critical. "Davidson reports to Manpower's chief executive, but each country still has its own head of IT who reports to their own chief executive or managing director," says Greer.
"We are not Big Brother. It is not our corporate culture to impose edicts. Manpower was built on local innovation and there is a real hesitancy to say, 'you must', rather than work by persuasion."
Although Manpower is a US company it receives 30% to 40% of its revenues from Europe. "The majority of our revenues are not from the US - we have a real international culture," says Greer.
Persuasion may be the preferred option, but it is underpinned by hard numbers. "We have some frank conversations," says Greer. "If we want to save money, we challenge those people who say they do not want to change things. The challenge is that if we can leverage global IT, we are looking at a potential 10% saving on our IT spend, which we can reinvest in killer IT applications for Manpower."
Face-to-face conversation is essential, he says. "Our senior business managers were always visiting each other [internationally], but our IT directors only met once a year for a two-day meeting." Now, as well as country IT managers meeting up twice a year, the global IT team is highly peripatetic, constantly visiting other countries.
"The twice-yearly international IT meetings are not just about each country making its own presentation," says Greer. "There are active working sessions on common topics, such as new technology."
Manpower's global IT group does more than liaise with local IT. "We have a small architecture group, a governance group and a global technology group, which run the shared applications, customises the common applications and hosts them. The groups also look after areas such as disaster recovery and centralised agreements with suppliers."
Improved supplier management is usually cited as a key advantage of centralisation. Greer agrees with this, but only up to a point.
"In 80% of cases we can save money by buying globally. For example, we have a global telecoms deal, but some countries can get a better deal [from suppliers], so in those cases buying centrally makes no sense and we would not do it."
Reducing the number of systems by increasing the number shared or used in common has helped cut down the number of suppliers the company deals with.
"Every country has 30 to 40 IT suppliers and we probably spend about 30% of our IT budget on suppliers. So if we standardise on a common server and PC platform, that can make a difference to spending," says Greer. Another oft-cited advantage of centralisation is consolidation. "We are setting up regional datacentres for consolidating local hosting and looking at possibilities such as global e-mail."
Pacing the introduction of IT centralisation is crucial, says Greer. "We take it step by step, but that is not the most important factor. It can be important to rush some things, but not others. If you have a set of global applications and countries are ready to receive them, it is important to roll them out as fast as possible to minimise the time the diverse systems are in [simultaneous] operation. This also minimises the cost - you pay maintenance from day one and if it takes three years to complete the roll out, you are wasting money."
"On the other hand, when you are moving to central hosting at a single datacentre, you must take enough time. Because we have some unique applications which are tightly integrated, the danger is of them falling over when they are moved. We do some heavy transactional systems, such as payroll for our staff, and if the system falls over the temps do not receive their paycheques."
Overall, Greer says, the process of centralisation should not be too slow or too sudden. "I have seen companies taking too long to put in global processes because they plan to do it with a big bang. Good IT governance does not like big bangs - you have to start small and let people see the value. You have to identify needs and deliver quick wins.
"Do not insist on 20 things you would love to have central control of. Start with five or 10 really important ones, and then add another seven to 10 until you slowly get where you want to be."
Like many IT organisations, Manpower has adopted IT governance software to gather comprehensive, standardised global data on which good governance decisions can be made and justified.
"We use Clarity from Niku. It has become our global IT desktop for running IT across different business units. It does reporting, time tracking, workflow, project and budget management, document management and handles Sarbanes-Oxley compliance."
Having a central global IT group is a cost, but one that must be managed and minimised, says Greer..
"When you create a global organisation there will be an overhead. But you must not let it be too large - the company must see value. It is important that our team is small and travels frequently rather than sitting in head office and giving orders."
"We have about 20 to 30 people at a higher level and the rest are developers of global applications who we take out of the country IT organisation. They get transferred rather than taking on new hires and they continue to work for their regions and countries."
Keep the global IT organisation small and practical, says Greer. "One of the big mistakes is to have too many central staff, too much theory and too many organisational diagrams."