IT shops standardize and consolidate systems where they can to save money and boost efficiency.
For Boeing, streamlining the business of engineering and manufacturing aircraft meant first simplifying its IT applications.
The aerospace giant had built up its business through mergers and acquisitions. By 2000, Boeing’s IT services division supported more than 4,500 applications across the company.
“Boeing is a large, global enterprise that was created from the merging of many aerospace companies in the ’90s. Consequently, we had a large number and variety of applications. As we became more integrated as a company, our feeling was that our systems were too complex and too costly,” says Boeing CIO Scott Griffin.
Boeing set out in 2000 to cut 25% of its applications. By 2004, it had trimmed the number of applications to 3,100 – a reduction of about one-third.
According to Forrester Research, IT consolidation and simplification is a growing trend among companies looking to make their IT shops more efficient, prepare for regulatory compliance audits and cut costs.
“Businesses must look at how to reduce the cost of routine IT maintenance. Simplification, standardization and consolidation are great ways to do that,” says Erin Kinikin, a vice president at Forrester. “When companies start looking at multiple systems that pretty much do the same thing, it’s questionable if they really need more than one.”
For Boeing, it was clear the company didn’t need multiple systems across offices around the world that performed the same tasks. Griffin says the company first began to identify all the systems they had in place, monitor how they were used and determine similarities among systems. The idea wasn’t to entirely wipe out systems but to find the value in an application, extract the value from one system and transfer it to another that performed similar functions.
“We went looking for overlap in a top-down effort in which we needed to prove the business case for every application,” he says. Boeing had 14 proprietary purchasing systems used in-house by its Hughes Satellite Sector and Boeing aviation groups. It was unnecessary to support all the systems, and now two purchasing applications adequately address Boeing’s needs.
“Companies need to figure out where it’s important for them to innovate and where it’s just the cost of doing business,” Kinikin explains.
For Scott Donaldson, vice president of software distribution and workspace automation at financial services company KeyCorp in Cleveland, maintaining a standard set of images for workstations not only makes it easier for IT to upgrade and maintain PCs but also helps employees work more productively.
Donaldson uses change and configuration management software from HP’s OpenView product line. He says two staff members can efficiently manage 23,000 end-user devices because KeyCorp reduced and standardized the variety of applications and images allowed on desktops. While workstations aren’t personalized to individuals, employees are able to work better because there are fewer conflicts among pre-set programs and the support staff can address problems quickly. Using the HP software along with standard systems helped KeyCorp save more than $4 million annually, he says.
“We had 100 different desktop images and the variation made support difficult,” Donaldson says. “Now knowing the user has one of a limited number of images, less than 12, makes it much easier to roll out workstations and get them back up and running. Standardizing makes it simpler.”
Jim Mileski, systems administrator at Financial Partners in Agawam, Mass., standardizes on network gear, servers, desktops, laptops and applications. The company sends out a download CD to employees each quarter to update server and client machines and keep them all running standard applications.
“Standardization helps automate IT tasks because I’m only supporting six end-user machines in theory, for example, rather than thousands,” Mileski says. “The upfront hardware costs to get standardized could be more, but in the long run getting standardized saves in labor costs.”
One key phase of IT simplification and standardization is defining business goals and identifying the processes and technology systems that can support them.
“Our approach to application simplification was to complete a business case with our internal customers on every targeted application. When the cost of shutting a system down – data conversion, re-pointing of interfaces, re-hosting of functionality – could be offset by the reduction to sustaining costs, then we removed the system,” Boeing’s Griffin says.
Taking the time to define business processes is critical to any standardization effort, Forrester’s Kinikin says. The reason most companies have too many applications all doing similar jobs can be attributed to the lack of standard practices. She advises network managers to first get their arms around desired processes and then compare applications and systems against the processes. The technology that aligns with the people and processes should be kept; those that require a lot of customization should be phased out.
“We find companies that take on simplification or consolidation as part of a redefinition of their businesses are more successful than those just looking to cut costs,” Kinikin says. “Depending on the business, it could be more
costly to consolidate and it might work better to remain separate and flexible.”
In Boeing’s case, the firm is pursuing another IT initiative that will impose common systems across the organization. One facet – the processes – of the project uses the IT management best practices laid out in the Information Technology Infrastructure Library.
Boeing will implement a specific computer-aided design tool, CATIA V5, for its business model dubbed Complex Vehicle Design, Build and Support. When a Boeing team begins to build hardware such as a fighter, tanker or commercial airline, it will use the same standard tool other teams building large equipment do. Now Boeing provides new departments, business units or project owners with an IT tool kit that stipulates standard systems, applications and processes and how they should be used to achieve optimal results.
“Now when starting a project, instead of asking people with expertise to relocate to where the proper systems are, we ship the work to them. It’s configured to our standards, and they can roll it out and get working more quickly,” Griffin says.
