Volvo consolidates worldwide IT to save £38.5m

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Volvo consolidates worldwide IT to save £38.5m

John-Paul Kamath

Volvo AB's IT division has begun an IT standardisation programme that will consolidate the auto manufacturer's 14 worldwide datacentres into three in the next two years, saving an estimated £38.5m.

The datacentre consolidation will reduce the number of physical servers needed to support the firm's 200,000 users by using virtualisation technology. By reallocating unused server capacity, the IT division will be able to offer more processing power with less hardware.

The standardisation project will allow Volvo AB to offer new services, such as tracking customer trucks using telemetry. "By improving the use of IT through standardisation, we will gain global control over our systems, and this will help us in deploying new services faster," said Ronny Westher, senior management adviser at Volvo IT AB.

The firm, which has already deployed a single system to replace the 25 systems previously used by dealers to place orders for trucks, plans to standardise all internal business applications by 2011.

"We used to have 25 scattered dealer systems that interacted with manufacturing systems. By standardising these applications and processes, we eliminate problems where a dealer places an order specification that the manufacturing division cannot build in time," said Westher.

He said improving the internal IT operations of the Volvo group could save approximately 10% of its £18bn manufacturing costs through faster production and fulfilment times and time to market.

Westher added that the biggest challenge in standardisation was the politics of moving different IT groups around the world on to a standard infrastructure. He said gaining regional buy-in when standardising systems was vital.


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