This paper was developed to provide general background to assist clients in decisions related to outsourcing IT.
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There are two kinds of enterprises that may benefit by implementing an enterprise-wide IT infrastructure consolidation.
The first is an enterprise that provides one service or product but is managed through multiple vertical business and support units.
A good example is a multi-layered global enterprise, i.e., an automobile manufacturer, comprised of research, design and development, engineering, test, production, and sales divisions.
Each division, together with hundreds of suppliers and distributors is part of one value chain dependent on a process that results in creating one single product – automobiles.
The basic ingredients for success were: To best illustrate the relative importance of the IT infrastructure to any enterprise, but more so to a highly complex multi-layered, multi-division enterprise, consider the model of the railroad industry.
This mode of transportation serves individual customers as well as commercial customers.
The rail traveler (individual customer) has one-type of convenience, the passenger train with a variety of services and configurations; passenger cars, sleeping cars, dining cars, lounge cars, observation cars, etc.
The second is an enterprise such as a pharmaceutical or consumer goods manufacturer that provides diverse products through its own or affiliated research, design and development, production, marketing, sales and distribution divisions.
Each division is a separate entity because it is independent, not part of an enterprise-wide process or value chain.
This enterprise is less likely to consider IT infrastructure consolidation for several reasons: The idea of shared services through consolidation of any of these activities rarely sees the light of day – who in his or her right mind would even consider such a monumental paradigm shift?
Nevertheless, there have been successful IT infrastructure consolidations in these two types of enterprises.