IT Consolidation

The Stephens Group conducted a feasibility study for  a major consumer products manufacturer  to consolidate IT operations for seven operating divisions.  The company had partially consolidated operations for three of the divisions and wanted to develop the cost justification and an implementation strategy for the remaining divisions. 

Several previous studies had been prepared by internal teams or external consultants.  Recommendations from those studies had not been implemented because they did not adequately address business concerns and/or the cost/benefit calculations were not believed.  The company's new business strategy was to consolidate basic infrastructure to leverage resources, simplify operations and reduce costs.   Prior to this change in strategy each IT organization reported to local division management.

We led a project team of selected IT operations directors from the un-consolidated divisions and departmental IT directors from the consolidated divisions.  The team was responsible for:

· Gathering factual data regarding, equipment, staffing, software and technologies employed by the various divisions.
· Determining what processes and changes would be required to consolidate IT operations.
· Determining what new investments would be required to support a consolidated organization.
· Determining the physical requirements to support a consolidated organization.
· Determining the organization structure for a combined organization and recommend roles for key personnel from each organization.
· Identifying spending and cost saving opportunities.
· Identifying issues or concerns that should be addressed to make the implementation successful.
· Developing implementation strategies, high level plans and timetables for the consolidation.

The project team members worked both independently and as a group to develop information, solicit input from staff and management and  educate the various IT organizations as to the purpose and benefits of consolidation.

Significant areas of emphasis and/or where there were significant issues included:

· The variety of technologies that would have to be managed in a consolidated environment.
· The need for comprehensive tools and processes to manage the variety of technologies while meeting business needs.
· How to retain key employees when consolidating to a new organization.
· How to satisfy divisional CIO's, CFO's and CEO's concerns that their organizations would be adequately supported by a consolidated IT  organization.
· How to insure that cost saving initiatives would be adequately addressed and implemented.
· Data security, business continuity and disaster recovery planning.
· Establishing standards of performance for operations and support.
· Determining how operating costs would be allocated to each division.

The team presented their findings  in several sessions to the divisional CIO's and key members of divisional management.  The Steering Committee made up of the divisional CIO's was responsible for the approval and ultimate implementation of the plan.  The divisional CIO's decided to accept the findings in the study while extend the implementation timetable in order to insure  key executives from the various divisions that their business needs would be supported by the new organization.

The consolidation has been completed, divisional staff members have been integrated into the consolidated IT organization and cost savings have been realized.  In addition the implementation was managed by the division CIO's and the project team members without additional assistance from consultants.