Shaken not stirred

The merger of drinks giants Guinness and United Distillers involved more than a simple blend in terms of IT - managers found a...

The merger of drinks giants Guinness and United Distillers involved more than a simple blend in terms of IT - managers found a shake-up was required. One key ingredient in the process was a "model office" that allowed users to "taste" the new system and give feedback. Julia Vowler reports

Global companies need global infrastructures; merged companies need merged infrastructures. But to merge global companies successfully you must establish - usually at speed - a common infrastructure that will shape and serve the resulting organisation.

As IT becomes an increasingly critical component in the corporate organisation, so does ensuring that the information service to the organisation is as seamlessly unified as all other infrastructure components, irrespective of geography, line of business or previous organisational history.

Diageo, the £26bn drinks manufacturing giant born of the merger between Guinness and United Distillers (UDV) has a strategy of seeking to acquire or merge with other businesses in the sector to solidify its presence in the market. So that was exactly the challenge facing its IT services managers.

"There were a number of integration projects under way for which IT was key," says Carmel Tyrrell, global systems and services manager at Diageo. This was because, she says, IT could not deliver the service business users were looking for under the disparate IT service management system that existed in the newly merged company.

Director of global information services Geoff Thirlwall wanted to provide a single service management tool set to the company, ensuring global service level agreements and asset management, with direct support to users via a series of regional helpdesks, all based on a common IT service management infrastructure.

In any integration programme resulting from a merger or acquisition, the new company can choose either to extend an existing infrastructure component or design from one of the companies across the other, or to start again from scratch. At Diageo, although Guinness had a more mature service management process than UDV, the supporting software was not scalable, says Tyrrell. "UDV was even bigger than Guinness," she says.

Worse, Tyrrell knew that Diageo was organising another acquisition, the massive Seagrams drinks company, which would compound the problem.

The planned acquisition meant the IT service management integration project had to be complete across Guinness/UDV before Seagrams joined. Tyrrell had little more than four months to implement a new IT service management infrastructure.

Her first task was to establish, throughout Diageo, what her users - the IT support teams - wanted. She knew, for example, that those at Guinness would not wish to lose the functionality they had enjoyed with their old system. Her task was to find something with a global capability that could still meet local expectations. "When you acquire a brand you acquire its people and culture," she says.

Nor could she count on much IT integration having already been accomplished between Guinness and UDV to blaze her trail. "There was some sharing of knowledge, and some global networks, but not much," she says.

As well as globalising and integrating IT service management, Tyrrell needed to improve take-up by business. A key concern of IT was to ensure that people were not using "back doors" to resolve system problems. "We would have to provide them with a better service, to discourage informal fixing," she says.

Workshops for users were set up to find out what their priorities were, and Tyrrell also established a "model office" installed with the selected service management software - Remedy, whose key advantage she saw as its customisability - where end-users could log in to try out the system.

"We gave access to users to see what we were building and give us their feedback on it," says Tyrrell. "We would do a chunk of development, then copy it to the model office and invite users to go and have a look."

The model office, an idea she picked up from Lehman Brothers' Web site, is "a fantastic concept", she says. "We got real interaction with it from day one, with users telling us what they did and didn't like."

Given the tight timescale, and the prospect of having to plug in Seagrams imminently, Tyrrell warned users that going live would encompass priority functionality only, promising enhancements later. "We have done two major service releases since then," she says.

Whatever the level of happiness of users, however much improved the level of IT service management, in any corporate merger a key driver will be cost reduction to satisfy shareholders.

The change from running two systems, with scattered development and support teams to pay for, showed cost savings. As well as being a single system, "It is all run out of the UK, so we have consolidated our costs," says Tyrrell.

With Seagrams successfully integrated into the new-look IT service management infrastructure covering Europe and North America, Tyrrell is now continuing with the global roll-out into the Far East and Africa.

"I have learnt valuable lessons," she says. "You can only do so much, accept that things will go wrong, get support - and keep going."

Merger issues at a glance
  • A process or system that worked well previously may not scale to the new, merged organisation and, however good, may need to be replaced

  • A merger joins cultures as well as structures: you must gain a degree of consensus from different communities

  • A company that is on the merger or acquisition trail may well continue on it - new arrivals should be expected at any time

  • Demergers, losing lines of business that come to be considered irrelevant to the new strategy, are also likely

  • Organisational integration programmes will be huge, and require substantial resources for which IT must compete

  • Conflict is inevitable, as well as competition for attention and resources, so getting top-down support is essential

  • Integration is not instant, however tight the timescale demanded - delivering only priority functionality in the first release will meet time constraints and allow full functionality to follow in later implementations

  • Whatever the improvements that a common global infrastructure promises, the merged company is supposed to run more cheaply than the sum of its parts.

Read more on IT outsourcing