This thought piece on People & Organizational Performance from a CIO perspective, is part of Navigio's Executive Series focusing on People & Organizational Performance
Capturing values through IT consolidation
Over the last decade many companies have improved efficiency and flexibility by consolidating IT operations and by standardizing the IT infrastructure. These changes have resulted in new requirements on the IT organization. Getinge Group succeeded with the consolidation of a common IT operation.
Navigio met with Pelle Lundgren, CIO at the Getinge Group, in order to understand how they have driven this change journey in the global organization and the key factors behind the successful change.
Consolidation was the key to success – CIO Pelle Lundgren shares lessons learned
The IT environment at Getinge had become fragmented due to acquisitions. IT were operated in several different and fragmented IT environments around the world.
Since 2008, Pelle Lundgren has been the Chief Information Officer (CIO) of Getinge Group. He is responsible for the common corporate infrastructure that supports the operational processes as well as for compliance, policy and security. The responsibility for IS, i.e. applications supporting the core business processes, lies within each business area.
When Pelle Lundgren joined the company an effort was underway to harmonize the different fragmented environments by outsourcing parts of the IT operations. However, the effort was not efficient enough and a decision was made instead to insource and consolidate the IT infrastructure.
– The objective was to establish a common IT infrastructure for the entire company group. For us a common IT environment was a necessary enabler to support the overall corporate strategy of leveraging our group scale by harmonizing non-customer facing processes. The challenge was huge but the result made it worthwhile, says Pelle Lundgren.
There are several reasons to consolidate the IT infrastructure. Cutting costs, improving service quality, boosting productivity and minimizing cost for integration of acquisitions are common objectives. In addition there is the possibility to more easily implement data security, to scale systems more quickly and to ease regulatory compliance. Naturally, there are also people focused benefits of a consolidation process. For example, in a larger and global organization it eases people development and thus supports retention of competence.
– Individuals are now a part of a larger unit and we have made sure that knowledge is exchanged across country- and organizational borders. Our company plans to keep growing globally and therefore our IT team needs people that can perform in a global organization.
Initially, Pelle Lundgren gained support to make the necessary changes from business managers and thereafter, he took over responsibility for all resources working with IT and the budgets for IT operations.
– We centralized the responsibility for all IT personnel, no matter where in the world they where stationed. This did render immediate and, if not direct cost savings, at a minimum cost avoidance.
Getting everybody on-board on the change was important.
– Open communication about what was happening and why has been a key success factor, says Pelle Lundgren.
Much of this communication was performed face to face. Pelle Lundgren travelled and met with the stakeholders and the affected IT staff.
Another success factor has been to avoid making major changes for the end users where possible. One example is that we have not changed the local support model, i.e. it is the same persons providing support to our end users as before. “Think globally, act locally” has been a very important motto for the project.
The beginning of the change journey
Getinge Group is organized into three independent business areas and the company also has a long tradition of working in a decentralized way. The principle of decentralization has been a major pre-requisite for the company’s past growth and has allowed the organization to quickly adapt to local market changes and needs. However this principle also has led to non-optimized IT operations that did not leverage the synergies across the organization. When Getinge Group decided to consolidate their IT operations the change journey began.
Every day, the goal of Getinge Group is to bring products to the market that contribute to saving lives, ensuring excellent care and preventing the spread of infection. The company is expanding rapidly through a mix of acquisition and organic growth. Today the company employs more than 15 000 people in 40 countries.
Getinge Group is organized into three business areas. Operational decisions are made at the company or at business-area level, while decisions regarding strategy, acquisitions and financial matters are made by the Board of Directors and Group Management. Each business area is independently responsible for product development, production and distribution of the specific product lines.
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