It will cause pain and cost millions but global companies have to standardise in the interests of efficiency and competitiveness, says Di Palframan.
Two months ago, General Motors bought 15,000 copies of a single software package for installation across its European sites. Eventually the company may standardise on the package worldwide, gradually replacing similar products purchased from a variety of software developers. The auto maker has recognised the need for a more consistent information technology strategy. It is not alone. The move to rationalise software use, not just locally but globally, has begun.
Unilever, ICI, Fisons Scientific Equipment and Pittsburgh Plate Glass (PPG) are a few of the companies that, along with General Motors, are now working on worldwide information technology strategies. The process is painful and time-consuming. All of these companies have computers and application software in abundance, massive databases of information and many thousands of contented computer users. The changes they are now proposing are on a scale not seen before in the information technology industry.
The reason for the upheaval is common to all the companies: they want to continue to operate worldwide, profitably and more efficiently. Pat Hickey, information manager of office automation and communications at GM Europe, puts it succinctly: "If we are going to compete, we have no choice. It's win or lose."
Increased competitiveness, these companies believe, will come from shared ideas and information, again not just across one site but across many. It will also come from the speed and ease of information-sharing. For speed, today's choice is electronic data transfer from one computer to another. For ease, the move is towards the use of the same software for a particular application or software that adheres to a well-defined set of standards and specifications.
In the past, most international organisations were content to let their operating companies define their own information technology needs. Unilever, with 500 companies worldwide, did precisely this and has reaped many local benefits. But in 10 years, according to Mike Johnson, head of information technology at Unilever, "We have not transferred one good idea between any two countries." Moreover, Johnson knows that the same ideas have been developed many times at local companies. "To continue like this would threaten the future competitiveness of Unilever," he believes.
What Unilever now wants is software portability. To achieve this, the company decreed at the beginning of this year that all new applications, developed in-house or purchased from outside, would conform to standards defined by the Open Software Foundation. Bold mandates like this are not issued lightly. Internal dissension by information technology departments or users can wreak havoc with corporate plans. For this reason alone, many companies opt to employ an independent consultant. Others, like GM Europe, now take time to ask users what they want.
After a year assessing the market, GM Europe chose Lotus Notes. The plan is to replace its existing mail systems with Notes. "This is a step towards globalisation," says Hickey. It will not be a cheap one. The cost of standardisation includes not only the software but its implementation and support and user training.
Fisons Scientific, an acquisitive company with 150 worldwide sites, has invested £25 million over the past three years on global strategy, which requires all companies to adopt Unix-based computers and software using the Progress database and fourth generation language.
ICI is spending even more on its worldwide switch to SAP's business management software. But cost is rarely a major issue in the move to common systems. Graham Collier, who recently moved from the process industry to head SAP's UK operation, sees it "as the next step in the efficiency process".
The global definitions of products and accounts that will result from these systems will give management a greater understanding of its business, he says. "Everyone in the organisation will be talking the same language. There will be fewer arguments in the boardroom about what the figures really mean." Having said that, Collier agrees that exploiting the capabilities of global software "takes a lot of energy, direction and cash".
Di Palframan is a freelance journalist.