InformationWeek

A key goal of the consolidation is to shorten the time required to close the books in each facility and deliver reports to headquarters, says Carrington. Sites have three days following the end of the month to close their books and transmit standard electronic reports to headquarters. Initially, that time will be cut to two days, says Carrington; in the coming months, the time required to close the books will be shaved to a day or so.

In the long term, the company hopes to see increases in revenue from its ability to access data in real time, as well as develop better ways of gauging supply and demand, and get products to market faster, Carrington says. But for now, Ingersoll-Rand is measuring return on investment in savings, not increased revenue. The company expects to see savings from a wide range of measures not possible before the centralization.

For example, Janson says, each factory orders parts and tools from a vendor that the facility or the individual company found to provide the lowest cost and best quality. In many cases, centralization will let managers at headquarters identify parts and supplies that are used in more than one facility-and then negotiate lower-cost contracts for the entire corporation.

"Purchasing will continue to be handled at the facility level," says Janson. "The factories will order what they need, and they'll continue to use their legacy systems to enter their purchase orders. But purchase orders will be transmitted to headquarters via CrossWorlds' connectors, and if we have a contract with a particular supplier for a particular item on the purchase order, the required material will be ordered from that supplier."

The centralized handling of purchase orders will let Ingersoll-Rand create business-to-business relationships with suppliers that include automatic transaction handling, which in turn will mean lower administrative costs, says Janson. Additional savings will come from Oracle ERP-based shared-services centers that will handle payroll and travel management for the entire company. Before the initiative, each of Ingersoll-Rand's companies handled its own payroll, and travel was frequently managed at the individual company. A central travel office with the ability to select low-cost fares will result in immediate savings, Janson says.

A single Oracle HR system will also be used to manage all U.S. employees. Previously, each company-and, in some cases, each facility-used its own HR system. "Employee self-service" will be available at Web-based kiosks in each facility, letting employees make changes to their 401(k) plans, health insurance, and other benefits. Managers will use the kiosks to fill out forms required to hire a new employee, for example. Janson says this will save money because fewer people will be needed to answer telephone calls about benefits, make changes to employee records, and manage paperwork.

Carrington says the consolidation project was envisioned long before the company "discovered" EAI. "But without EAI," he says, "we'd have to examine the entire initiative very closely. It would be very difficult to implement." CrossWorlds was selected because it's the only EAI vendor that offers three features Carrington considers essential: an industry-standard "technology stack," a transport protocol for exchanging data; industry-standard authoring tools, which transform data from a particular application format to a format understood by another application; and business-object formats, which act as templates for the creation of standard transactions such as purchase orders. CrossWorlds offers the IBM MQ technology stack; Mercator, IBM MQSI, and CrossWorlds authoring tools; and a wide range of its own proprietary business-object formats.

"These standards aren't going away, and we aren't locked into a proprietary solution," Carrington says. "CrossWorlds is the only company we found that had the technology components and the business components to make this work right."

CrossWorlds was among the first EAI vendors to provide off-the-shelf "connector modules" for major ERP apps, along with custom-connector development. Many of CrossWorlds' out-of-the-box connectors enable apps to share data at the API level. "If you have five or six applications running and only one is being upgraded, only the connector for that one application needs to be upgraded," says Vas Vasiliadis, VP of strategies for CrossWorld.

Before packaged EAI tools came along, individual connectors had to be built to link each application: If one application was to be linked to five others, it would require five connectors; if there were five applications to be connected to one another, the number of connectors would be 25-five connectors to each application. And if one of the connected applications had to be upgraded, all five connections to that application would have to be rebuilt.

"We were faced with the options of developing interfaces ourselves between the ERP apps and the legacy applications, or finding a vendor that offered a simpler solution," says Carrington. "If we were going to do the development ourselves, more than 300 interfaces would have to be developed, and the result would take a lot of people to support to make sure the interfaces continued to work."