subscribe: Daily Newsletter

 

Consolidation: it’s not about the costs

0 comments

Kathy Gibson reports from Oracle CIO Summit in Sandton – Data centre consolidation is about way more than saving costs – although this can be significant.

MTN recently completed a continent-wide consolidation project, which has led to much greater benefits than initially anticipated.

Martin Lamprecht, who is leading the consolidation, points out that MTN is present in 22 different markets and serves more than 22-million customers.

“When we started looking at this it was a way to reduce costs,” he says.

But this quickly led the company to look at its operating model and well and to realise that consolidation went beyond pure technology. “It came down to people, processes and technology – and how a global organisation was to operate going forward.”

The group realised that operations in 22 countries equates to 22 different company all using their own traditional architectures and operating in the own unique ways, with little control from head office.

“We needed to operate as a single multinational organisation,” he says. “That’s what the brand promised, but it wasn’t the way we operated.

“We had to make sure the organisation is glued together; can move talent across the markets; speed up execution and drive compliance issues.

“And we needed to look at ways to add value, to drive profitability and to increase our focus on the customer.”

This led to an examination of the operating model itself, and to the business requirements. Meetings were held with CEOs, CFOs, COOs, CIO and HR managers from all the operations to craft a single operating model for the future.

“Then we looked at the infrastructure and technology, and came up with our global transformation. But the main driver came from the business and was about being as efficient as possible.

“Just one element of the transformation was the decision on the technology,” Lamprecht says.

It is at the technology layer, though, that the greatest opportunity for consolidation presents itself, he adds, but the benefits resonate through the organisation.

“There’s the cost benefit, but it also helps to have a single version of the truth; in dealing with the vendor community; standardisation of processes; even understanding the true cost of an individual within an organisation.

“There is a lot of hidden cost in running disparate systems and consolidation can help to expose and eliminate that.”

Importantly, transformation is not something that a company can do once and then rest on its laurels.
“We don’t know where this thing is going to go to,” he says. “In five years’ time we might take everything that we’ve standardised and move it into the cloud; or we might be delivering other services.”