Unisys Corporation - IT Governance and Prioritisation

In the late 90s, Unisys faced a most serious and somewhat ironic challenge. A company that had been at the forefront of the information economy for decades found its IT infrastructure in dire need of modernising. But the heavily leveraged corporation was facing pressure from its creditors. This meant that the time-consuming and expensive overhaul would have no allocated budget. In fact, the team responsible for overseeing it had to find almost $100 million from existing IT funds - an ordeal that soon earned the label "Mission Impossible".

by Theodoros Evgeniou,Anne-Laure Fayard
Last Updated: 23 Jul 2013

In the late 90s, Unisys faced a most serious and somewhat ironic challenge. A company that had been at the forefront of the information economy for decades found its IT infrastructure in dire need of modernising. But the heavily leveraged corporation was facing pressure from its creditors. This meant that the time-consuming and expensive overhaul would have no allocated budget. In fact, the team responsible for overseeing it had to find almost $100 million from existing IT funds - an ordeal that soon earned the label "Mission Impossible".

Assistant Prof. of Information Systems Theos Evgeniou and Assistant Prof. of Technology Management Anne-Laure Fayard relate the 1997-2004 top-to-bottom transformation of Unisys's IT structure. The initial problem: the previous CEO had radically decentralised the methods by which IT strategy and investment decisions were made. (He had, in fact, decentralised the entire corporate leadership structure.) Unisys's IT staff was far too large. The corporation was often duplicating legacy systems, and was often using overly complex and non-standardised IT infrastructures.

The authors describe how the Cornerstone project was launched. This company-wide initiative set out both to simplify and standardise business processes as a whole, and provide the necessary complimentary information architecture. Cornerstone was to compromise three central components: an enterprise resource system, a customer relationship management system, and a knowledge management system.

The case describes how Unisys's new CEO jump-started the IT reorganisation, among other structural reforms. The corporation's move from independently developing proprietary applications towards the latest in "out-of-the-box" solutions was a watershed development for its IT organisation - and completely changed its relationships with most if its vendors. In time, the IT standardisation proved a great cost-saver, with far fewer vendors being necessary. Unisys has come to see the Cornerstone project as a triumph over the past few years, with a 166% ROI for its three main IT pieces. The company has managed to chop its annual IT capital expenditure by an average of 20%, while sharply cutting its total cost of ownership.

The case concludes with a description of the possible road ahead for Unisys regarding business optimisation. Its decision to adopt the CoBit methodology for framing and optimising its IT process has enabled it to frame how its IT should be managed. Moreover, Unisys has decided to leverage the experience and knowledge accumulated from the implementation of Cornerstone to build business propositions for its clients, hopefully enabling them to do the same with their own IT operations. However, the authors pose the questions of whether this service, Blueprint, will prove marketable enough in its present form. In fact, is it even possible to provide such a service in its current form? Is it still too early to say that the lessons learned from Cornerstone have even been an undeniable success for Unisys, in anything more than strictly financial terms?

INSEAD 2004

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