Stop duplicating effort

IT departments in global companies are wasting millions of pounds because work is being repeated and expertise is not being shared. Julia Vowler finds out how credit card company Capital One is tackling the problem.

What is the point of learning how to do something well in one part of an organisation if another part of the business has to learn the same thing later on? The problem of duplication of effort, which wastes time and resources, is especially prevalent in international organisations, and it is an issue that credit card company...

Capital One has been tackling in its IT department. For Capital One, achieving this deceptively simple goal has involved agreeing common IT systems and standards worldwide wherever possible, and encouraging IT staff in different countries to work together on projects. The process started last summer when Ray Scotter, IT director of Capital One's UK operation, met up with his US counterpart, Mike Coury, to discuss the practicalities of "globalising" the company's IT. "A lot of companies talk about it, but it usually consists of sending minutes of meetings to each other," says Scotter. "At the summit we pulled a team of senior people together to see where there were real opportunities for IT alignment within reasonable cost and time. "At first we were a little apprehensive about whether our proposals would stack up, but we were delighted to find that there were far more opportunities than we had anticipated. We had to say, OK, let's calm down and do one thing at a time." The choice of what areas of IT to tackle first was made on how they could benefit the relevant business units. "I knew we would be dead in the water if we did not justify it," says Scotter. A handful of "centres of excellence" were formed to help define, develop and oversee the adoption of IT standards. Any IT project that breaks new ground or simply does something well becomes a centre of excellence. For example, a division outside Europe wanting to introduce a new technology, such as IP telephony, could refer to the UK IT unit that has already done it. However, Scotter and Coury knew that could not dictate to every division of the company that they should follow what the centre of excellence had done. "We could recommend they use the same solution, but we didn't dump it on them - we were not overly prescriptive, so we got buy in," says Scotter. Moreover, local variation, where it is justified, is tolerated. With the number of credit card customers 15 times greater in the US than in the UK, for example, it was unlikely that the UK would use the same card processing system. On the other hand, fraud detection systems are independent of the size of the database they monitor, so that could be something common to the US and the UK, says Scotter. Capital One is carrying out its IT globalisation programme in four stages, or "chunks", as the company refers to them. "Chunk one was traditional gap analysis. It defined what we have got," says Scotter. "The process was quite painful, but useful." It indicated what the starting points of the project should be and highlighted where wastage was occurring. Chunk two focused on how to eradicate these duplicated processes and systems - but only if there was a benefit from doing so. Chunk three was putting the plan into action across the Capital One business. Business processes and then IT systems were standardised globally, with some exceptions. Chunk four involved setting up a continuous improvement programme to ensure that efforts do not go off the boil. To that end, Scotter and Coury set up a globalisation team of l5 to 20 people to oversee progress on the project. But what return on investment has the project delivered six months on? The amount of downtime due to capacity problems is down, and that, says Scotter, can be measured and priced in terms of time lost to call centres and sales staff. Capital One is not yet able to say how much money, if any, it has saved through its IT globalisation project but the company remains bullish about its long-term benefits. "We are seeing other areas of the business, such as corporate real estate, look to do more globalisation now," says Scotter. In many ways Capital One's project is common-sense: standardise systems where possible and share key IT skills across offices and countries. However, the systematic approach taken by Capital One is often abandoned, resulting in complex and unwieldy business and IT projects. As firms look to streamline their worldwide IT systems, Capital One's approach could serve as a model for other IT departments.

 

Global practices achieved by Capital One   

Capacity planning   A "capacity council" was set up to share knowledge about capacity requirements in the US and findings of a US capacity analyst with the UK operation. This helped UK staff accurately predict the need for more storage from website traffic and the impact of TV advertising.   

IP telephony  When the UK implemented IP telephony, US staff worked on the project so they could prepare for an expected US implementation.   

Offshore call centre support  The UK branch used the existing US-based support teams because the US operation was already using a call centre in India.  Supplier management  This involves more than simply agreeing a global price, says UKITdirector Ray Scotter. It covers global support for common practices and procedures at Capital One.    

Systems software  New releases are checked out only in their respective centres of excellence. "We test and prove only once," says Scotter. "For example, the Aspect voice switch for the offshore call centre was only tested in the US."   

Data marts  This is coming next, says Scotter. "We are looking at our whole data storage strategy, we are a huge user of data," he says.

Globalisation best practice   

Don't impose IT globalisation. Everyone needs to feel ownership 

Be selective about globalisation versus localisation. Define what is suitable to be globalised 

Talk about it as best practice and make the centres of excellence available to everyone 

Justify adopting a common process or system within the business case 

Have a manageable, dedicated globalisation team as a focal point, but it also needs to have local representation 

Don't rush ahead with opportunities for alignment on the "it's obvious" basis - analysis will show opportunities that are not expected  

Don't spend too long analysing where IT can be made common, but don't impose a deadline on divisions reporting back on this  

Run it as a specific programme, not a set of disparate activities 

Don't let it be seen as the triumph of one country over another whose processes and systems always win out.

This was last published in February 2003

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