Quelle: CIO Asia
On May 3, 2002, Hewlett-Packard Co. and Compaq officially merged, beginning operations as one unified company. The new HP serves more than one billion customers across 162 countries. Among the many activities to create a single company was the integration of the hp.com and compaq.com websites, which before the merger operated separately and had distinct brand identities. This was no way to run the business, says Marius Haas, vice president of worldwide e-business at HP. "Customers did not want to navigate two websites, manage two accounts, and deal with two account teams. They wanted one engagement point and one team to deliver the partnership experience they were looking for. On our part, the integration of the two websites was motivated by the need to have a portfolio of products larger than any competitor's. When our customers log on to hp.com, they should have access to our full portfolio of products and services," he explains.The integration of the two websites necessitated Haas and his team to consolidate the commerce engine so that the blue supply chain of HP and the red supply chain of Compaq products were made invisible to both companies' customers.
Indeed, having a single hp.com experience was one of the day-one deliverables for Haas in the two companies' integration blueprint. In May last year, Haas and his team delivered. A single global entry point to hp.com went "live" then, providing a single product andservices catalogue with 10,000 products and services within a virtual showroom.
"Launching a single brand - that was the easy part," says Haas. "The difficult part was dealing with two large infrastructures, at times more than two because when Compaq acquired Digital and Tandem, the same rigour in merger planning was not applied, and in some instances, there remained Digital and Tandem equipment and systems that talked to one another but were not fully integrated."
Although HP and Compaq did not come into the merger consolidation cold, they needed to call in experts to avoid falling into common M&A death-traps. Haas himself was responsible for the integration planning and execution of all business systems and their attendant processes and operations, including customer-facing Internet activities from hp.com, public stores, extranets and B2B e-procurement integration solutions. Haas has experience consolidating Compaq's Webinfrastructure and operations after Compaq decided that a centralised model would leverage efficiency and improve cost structure. This experience, he says, helped him tremendously to think about what systems and processes to rationalise, and what criteria to base these decisions on. The first action by Haas' team's was to create a gateway structure that dictated what would be consistent around the world on May 7, 2003. From there, they then brought in more operating teams and consolidated the pieces underneath. Haas first put forth a plan for the site's infrastructure that acted as a foundation for how the rest of the sites would come together. His team also had to bring together the internal sites specific to a segment into one infrastructure. Haas says he came up with a number of different scenarios and asked ex-Compaq head honcho Michael Capellas and HP chairman and CEO Carly Fiorina which fitted their objectives. Planning started in November 2002 and the site went "live" on the first day of the merger.
Haas says the process of choosing the technology to be retained was a straightforward one. "We followed an 'adopt-and-go' guiding principle," he says. "We were not going to create new systems and could not afford to define new requirements as we wanted to immediately have people who knew the systems and business processes intimately and who could train the other half of the organisation. It also made sense from the cost savings perspective." Decisions were made on the basis of how quickly cost savings could be delivered based on knowledge and expertise they already had.
A training guide to get everyone up to speed immediately was given to each function, and internal communications went "live" on May 7, 2003. "Getting everyone to start executing the plan was also the riskiest part of the integration project, and the challenge was to get things communicated to the rest of the organisation in a rapid manner," saysHaas.
Engage all folks
The standardisation decisions weren't a case of IT choosing the platform. A cross-functional team comprising top executives from finance, HP's commercial operations, HR and other business units met every week to make sure that for any open item worked on, time was dedicated, and a process was set.
The reduction into one system is not done yet. One of the items on Haas' agenda is to deploy an hp.com business-to-business portal around the world for its private commercial customers. "We are creating a personalised experience that will dynamically render the specific products and services customers want access to, so that they can have a consistent experience around the world. They will be educated on available products and services, and can transact business directly and indirectly with HP's huge network of distributors and reselling partners, as well as enjoy a post-sales experience from a services standpoint, and activities such as global order reporting and global order status capability. Customers can then see the value of one company coming together with the largest portfolio of products and services, and full lifecycle capability online."
After that, Haas says, the public and private experiences will be blended into one 'my hp.com' experience. "Then, regardless of who customers are, we will know their preferences and can dynamically render their desired products and services because of a single blended infrastructure," he explains.
The jump to a single system involved a lot of risk. Many tasks were hard enough, says Haas. "Our customers wanted to receive a consolidated product, but not all components were assembled in one location, so the blue and red supply chain systems of HP and Compaq had to be planned for an in-transit merge. Also, when we 'adopt-and-go', the volume increases twofold, so where we might have one vendor handling the backend logistics, all of a sudden, if that vendor is not the same one used by the other pre-merged company, it would need to make sure its systems could handle two times what it was handling before."
The worst-case scenario was if the merged website could not take orders, or if HP could not service customers who wanted a service event or called its call centre. Well understanding these risks meant planning for the best time for integration. "We did not do it in the last month of the quarter, or the last quarter of the year, for instance, but looked at the opportune times to make these risky pieces less so. We knew where the pain thresholds were, and had a SWAT team go in to resolve any issues that came up," says Haas.
Contingency systems were also put in place when logistics hubs were consolidated and the call centre system was changed. "We had to make sure staff at call centres were trained." On the first day, says Haas, he put in the necessary buffers to handle five times more than the expected load capacity because he didn't want the site to go down due to not being able to cope with the higher traffic.
Haas is expressive when it comes to revealing metrics and cost savings. "On hp.com, we have increased customer satisfaction by 30 percent now that we have one experience. We conduct about 4,000 surveys in a month. We did a brand perception study before customers visited hp.com, and afterwards. In the consumer space, for instance, brand perception went up the roof because customers did not realise the breadth of the product and service portfolio that HP has." Now that the site is fully integrated, 99 percent of all pages are tagged, meaning that there are Java scripts in the pages that allow administrators to see where customers go and what they do. "If we identify behaviours that are not conductive to a good experience, such as a high exit rate for a page, we can tweak the page to optimise it for that experience. Because we have one system and process worldwide, we can quickly make an adjustment," says Haas. Together the consolidation delivered part of the US$ 3.5 billion in cost savings within the first year-and-a-half of HP and Compaq coming together as a company.
From Seven To One
Assumption University (AU) in Bangkok, Thailand, too had integrationneeds. They faced many challenges. Firstly, transactional data weredistributed in seven standalone systems, with three databasemanagement systems and four developer tools. These systems ran onSolaris and Windows platforms. Various system owners created their owndata, resulting in data inconsistency across departments and systems.There were no ways to tell which set of data were the most updated andaccurate. Secondly, sharing of data amongst departments and officeswas by means of diskettes and off-line transport, and real timeupdates were not possible. This often resulted in wrong representationof important data, which greatly affect the reliability of informationdispatched to the public and community.
In the area of infrastructure management, user identity and resourcedistribution and services were manually operated. Services became slowand untimely, and customers became dissatisfied with the servicesprovided by IT. Systems were also continuously attacked by bothexternal and internal agents. The total cost of management was high,with the need to employ many IT staff.
To solve its integration problems, AU implemented ONE NET solutionsusing Novell Net Services software. The implementation took 10 monthsfrom requirement assessment to the final ONE NET systemimplementation. It engaged three teams of more than 30 implementers,from Novell, TCS and the University.
The solution, put in place since March last year, has paid off. Forone, AU's complex internetworking infrastructure has been integratedby the deployment of a global directory, resulting in centralised IDmanagement and resources distribution. By integrating the globaldirectory with specific security equipment, the ONE NET infrastructureand eBusiness solution are protected against malicious attacks andother security threats. The deployment of Novell Netmail and iFolderhas also facilitated closer collaborative work across geographic areasand time differences.
Using the Directory system, user ID management and resourcesdistribution are centrally and almost automatically replicated andmanaged, requiring fewer employees to service and less specificexpertise to master. Business continuity, enhanced by the new securitysystem and consolidation of all data storage, is 99.99 percentguaranteed. Distributed databases, using ONE NET to manage, are alsomore manageable, and sharing of data becomes easier, resolving dataredundancy and integrity problems. User experience in accessing theuniversity's IT resources has also greatly improved with the newportal system that comes with a secure single sign-onfacility.
AU expects to reduce its total cost of operation of the newinfrastructure and information systems. It expects to have to employless than 10 specialised employees to reinforce its current ITworkforce of 100 to handle and operate the quantitative expansion, andquality of services provided by the university to the increasingnumber of students on the two campuses.