Having most of the infrastructure decisions taken offshore "liberates" Macdonald's role to where he can "add value at the touch points with customers". He believes having much of the infrastructure and standards centrally provided and global procurement deals in place leaves him able to be agile and flexible at the touch points with the local customers or authorities.
For instance, he and his team were able to concentrate on preparing the Australian operations for the implementation of the Australian Customs Service's CMR system late last year, rather than fit it around running the day-to-day IT operations. "It was a traumatic time but we were prepared," Macdonald says of the fraught introduction of Customs' new system.
However he, like Bartlett, acknowledges that the challenge comes if you need to "change the machine". "We want innovation close to the customers. There's the dilemma because you want repeatable standard business procedures but with intimate flexibility," Macdonald says. Where a fundamental change is identified as required, then the subsidiary CIOs have to negotiate the bureaucratic procedures that surround the governance of any change. "Those that use it well can get their changes through but there are a lot of competing priorities. And while we could all be rampant innovators, in our business our customer is asking for a standard, reliable service."
According to Macdonald, in global organizations such as DHL, which rely on repeatable transaction-based IT, good governance is paramount but not at the expense of speed. "You have to have a clear process for decision making and if the decision is negative you've got to have that decision made relatively quickly."
Both Unilever and DHL are information intensive businesses. In other organizations, where IT plays more of a support role, many subsidiary CIOs are left more to their own devices.
Timely Decisions
Marketing and service is the name of the game at the Australian subsidiary of Japanese watchmaker Seiko. The company needs information systems but they are not the primary focus of the company. Consequently, while the Japanese parent is quite clear about how the Australian subsidiary goes about marketing or product servicing, it leaves the IT function largely to its own devices, according to IT manager Bruce Weber. Weber and his team of four are "extremely autonomous"; they get almost no direction from the parent company. So autonomous that when the local subsidiary decided to create a local spare parts trade Web site, head office only suggested that the local IT group create a similar "ambience" to the Japan site, and instructed Weber that he should not just mimic the Japanese site. However, brand, public image and the interface with the customer through the corporate Web site is tightly controlled by Japan.
In 18 years at the company, Weber has spoken to his IT counterparts in the UK and visited the Hong Kong operations but confirms "we very much run this on our own", and cites an example of how much autonomy each division has. "In 1990 we had a Wang system and a custom application, but we were looking to upgrade. Seiko UK had Oracle financials and Japan said 'please consider'. A little while after that Japan went SAP." Seiko Australia, meanwhile, went ahead and developed its own in-house systems, Weber says.
While he appreciates the autonomy, Weber says he has in the past approached head office about attempting to broker larger group discounts from vendors and there is now a purchasing agreement with Microsoft that cuts costs slightly. "Still, I've always wondered why we haven't taken more advantage of our buying power," he says. "But we are a marketing and manufacturing company. That's where our focus is — IT is just seen as a support function."
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