Centralization has brought benefits both in terms of consistency and economies of scale. "From a negotiation standpoint, we can optimize on infrastructure, people, vendors and products," Dow says.
Accelerating speed to market
Equifax, an Atlanta-based financial services firm with operations in 18 countries, struck a balance between meeting local needs and standardizing the business's core, in-house applications, says CIO David Webb. "We launched a program to create a bureau in a box with one code base we deploy all over the world, but with the core here and a wrapper for each country," he says.
Prior to that, the $1.96 billion company was using 25 different programming languages and 25 different databases. Now, all of the back-office elements are centralized and consistent. "It's the user experience and mobile [interfaces] that vary," Webb says.
Equifax executives realized this was possible because 80% of what the business units do is the same regardless of the country in which each operates. Now, Webb says, new product introductions take days or weeks instead of months. "We are in the data manufacturing business," he says. "It's about speed to revenue and speed to market."
But Webb says globalizing IT operations is also about total cost of ownership and economies of scale. "I don't want local countries negotiating with different [service providers]. We may be a small player in one locality, but when you roll that up we are a large player. It's all about pricing at the end of the day," he says.
Controlling the urge to customize development is essential, says P&G's Fortner. "Our partners would love to create custom code for everything," he says, so P&G sets expectations with partners up front. "We want frugal innovation at one-third of the cost, with a much faster time to implementation, and following application standards across the enterprise," he says. Custom code is allowed only when it creates a competitive advantage.
But not everything that should be consolidated can be consolidated; sometimes regulatory requirements, contractual issues or other hurdles get in the way. For example, many of Equifax's customers have contracts stating that their data must stay their home countries. That puts limits on what Equifax can do with the data. "We could have gone out and renegotiated, but the business didn't want to do that," Webb says. Instead Equifax will wait and make changes when it's time to renew contracts.