MINI CASE Building Shared Services at RR Communications Vince Patton had been waiting years for this day. He pulled the papers together in front of him and scanned the small conference room. "You're fired," he said to the four divisional C IOs sitting at the table. They looked nervously at him, grinning weakly. Vince wasn't known to make practical jokes, but this had been a pretty good meeting.. at least relative to some they'd had owr the past fiw ye.lrs. "You're kidding." said Matt O,l\ves, one of the more outspoken members of the divisional CIO team. "Nope," said Vince. " I've got the boss's OK on this. We don't need any of you anymore. I'm cre.lting OIlE' en- terprise IT organization, and there's no room for any of you. The HR people are waiting ou tside." With that, he picked up his papers and headed to the door, leaving the four of them in shock. ''That felt good," he admitted as he strode back to hisotfice. A big man, not known to tolerate fools gladly (or corporate politics), he was not a cruel one. But those guys had been thorns in his side ever sina' he had taken the new executive VP of IT job at the faltering RR Communications five years ago. The company's stock had been in the dumpster, and with the dramatically increased competition in the telecommunications industry as a result of deregulation, his friends and family had all thought he was nuts. But Ross Roman, RR's eccentric but brilliant founder, had made him an offer he couldn't refuse. ''We need you to transform IT so that we can introduce new products more quickly," he'd said. "You'll have my full backing for wha tever you want to do." Typically for an entrepreneur, Roman had sketched the vision swiftly, leaving someone else to achmlly implement it. "We've got to have a more flexible and responsive IT organization. Every time I want to do something, they tell me 'the systems won't allow it.' I' m tired of customers complaining aixlut getting multiple bills for each of our products. It's not acceptable that RR can't create one simple little bill for each customer." ROIThln punctuated his remarks by stabbing with his finger at a file full of letters to the preSident, which he insisted on reading personally each week. "You've got a reputation as a 'can do' kind of guy; I checked. Don't bother Illi' with details; just get the job done." Vince knew he WI!S a good, proactive IT leader, but he hadn't been prepared for the he inherited ... or the politics. TIlere was no central IT, just separate divisional units for the four key lines of business-Internet, mobile, landline, and cable lV servict'----each doing their own thing. Every business unit had bought its own hardware and softvvare, so intrcducing the common systems that would be needed to accomplish Roman's vision would be hugely difficult; that is, assuming they wlllllcd them, which they didn't. There were multiple sales systems, databases, and customer service centers, all ot which led to customer and business frustration. The company was in trouble not only with its customers, but also with the telerommwlications regulators and ,\lith its software vendors, who each wanted information about the company's activities, which they were legally entitled to haw but which the company couldn't provide. Where should he start to untangle this mess? Clearly, it wasn't going to be possible to provide bundled billing, responSiveness, unIfied customer care, and rapid time to market all at once, let alone keep up with the new products and services that were flooding into the telecommunications arena. And he hadn't exactly been welcomed with open arms by the d ivisional CIOs (DIOs), who were suspicious of him in the extreme. "Getting IT to operate as a single enterprise unit, regardless of the product involved, is going to be tough," he admitted to himself. ''This corporate culture is not going to take easily to centralized direction." And 50 it was. nle DIOs had fought him tooth and nail, resisting any form of integration of their systems. So had the business unit leaders, Building Shared Servicesat RR Communications 127 themselves pfE'Sidents, who wert> rt>wardt>d on the basis of the performance of their divisions and, thefE'fort>, didn't giw a hoot about "the entt>rprise" or about anything othff than their quarwrly rt>stilts. To them, centralized IT meant increased bureaucracy and much less fret>d.om to pick up the phone and call their buddy Matt or Larry ur Ht'lt'n ur Davt' and gt't that tu drop everything to deal with their l1tt'St moneymaking initiative. The fact that eVffY time they did this, it cost the enterprise more and more didn't concern them- they didn't cart> that costs racked up: testing to make stue changes didn't affect anything else that was opt>rational; creation of duplicaw data and files, which often pt>rpetuated bad data; and loss of integrated. infomlation with which to run the entt>rprise. And those didn't even cover the fact that the company needed an army of "data cleansers" to prt>pare the rt>pOrts needed for the govemment to meet its regulatory and Sarbanes-Oxley rt>quirt>ments--wasn't their concern. EVffyone beliE'Ved his or her needs were unique. Unfortunawly, while he had Roman's backing ill theory, in practice Vince's position was a bit unusual because he himself didn't have an enterprise IT organization as yet and the DlOs' first allegiance was clearly to their division prt>sidents, despite having a "dotted line" reporting rt>lationship to Vince. The result was that he had to choose his battles very, very carefully in order to lay the foundation for the future. First up was redesigning the company's internal computt>r infrastructurt> to use one set of standard technologies. Simplification and standardization involved a radical reduction of the number of suppliers and centralized procurt>mt'Ilt. The politics wert> fierce and painful with the various suppliers the company was using, simultaneously cotuting the DIOs and business unit leaders while trying to sell Vince on the merits of thd r brand of technology for the whole company. Matt Dawes had done everything he could to undermine this vision, making sure that the users caused the maximum fuss right up to Roman's office. Finally, they'd had a showdown with Roman. "As far as I'm concerned, moving to standardized hardwart> and softwart> is nondiscussable," Vince stated bluntly. "We can't even beg;'1 to tackle the issues facing this company 128 St>ction II IT Governance without it. And furthermore, we are in serious noncompliance with our softwart> licensing agreements. We can' t even tell them how many users we have!" This was a potentially serious legal issue tlmt Imd to be dealt with. "I promised our suppliers that we would get this problem under control within eighteen months, and lhey've ; and putting tools, metrics, and poliCies in place to manage them and t'Ilsure the plan was respected by the divisions. Dawes and Larry Hughes, another DIO, had tried to sabotage him on this matter yet again by adopting another manufacturt>r 's customer rt>lationship management system (and yet another database), hoping that it could I:e up and running befort> Vince noticed. But Vince had mowd swiftly to pull the plug on that one by rt>fusing the project access to company Imrdware and giving the divisional struchlre yet another black mark. 11ml episode had highlighted the net>d for a steering committee, one with tet>th to make sure that no other rogue projects got implementt'l.1 with "back door funding. " But the company's entrepreneurial culturt> wasn' t ready for it, so again, foundational work Imd to be done. "I'd have had a riot on my hands if I'd tried to do this in my first few years hert>," Vince reflected as he walked back to his office, stopping to chat with some of the other executives on his way. Vince now knew everyone and was \videly respected at this le"el because he understood their concerns and interests. Mainly, these wert> financial-delivering mort> IT for less cost. But as Vince moved around the organization, he stressed tlmt IT decisions were first and fort>most busilless decisions. He spoke to them in business terms. "The company wants one consistent brand for its organization so it can cross-sell services. So why do we need different customer service organizations or back-end systems?" he would ask them. One by one he hJd brought the "C" -level executives around to at least tllillkillg Jbout the need for an enterprise IT orgJnizJtion. Vince hJd Jlso taken JdvJntage of his weekly meetings with RomJn to demonstrJte the crilicallink'lge between IT and ROIlld. El'crytllil1g he needed to do next relied on this, but the business saw it differently when he'd last tried to broach the subjt>ct with them. "This is our data, and theSt' al'l' our customers," they'd said. "Don't mess with them." And he hildn'l ... but that W,lS then. Now it was eSSt'ntiaJ to get their information in order. But what would he have to do to convina> them and to make it happen? DISCUSSION QUESTIONS 1. List the advantages of a single customer St'rvice center for RR Communications. 2. Devise an implementation stratt"gy that would guarantee the support of the divi· sional pl'l'sidents for the shared customE'f St'rvice center. 3. Is it possible to achieve an enterprise vision with a dec{'n traliz{'d IT function? 130 Section ll rr Governance 4. What business and IT problems Ciln be cauSt'd by l1ck of common information and an entE'fprise 1M stratt>gy? 5. What govE'fnance mechanisms need to be put in plaa> to ensure common customer data and a shared customer St'rvice center? Wha t metrics might be useful?
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