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Northrop Grumman Relies On Shared-Services IT Model

Keeping standards up to date is key, said IT executives at an InformationWeek conference.

One size doesn't fit all for Northrop Grumman. The $30.7 billion company has taken a shared-services approach to IT, in contrast to companies such as FedEx, which follow a federated IT plan, said Northrup Grumman IT executives speaking Monday at the InformationWeek 2006 Spring Conference.

Since the merger of the two original military contractors in 1994, Northrop Grumman has expanded from "a small aircraft maker," in the words of Keith Glennan, VP and CTO of the company's internal IT operations, to a major supplier of military aircraft and equipment, satellite technology, communications gear, and IT and systems integration services.

For 10 years, while the company has grown and made more acquisitions, such as TRW three years ago, the company has developed and fine-tuned its shared-services IT model as a way to maintain operating efficiencies and control costs while providing engineers and other employees with a way to collaborate across the company.

Much of the company's efforts have revolved around aligning and standardizing its infrastructure systems, including directory and security services, network and messaging technology, and collaboration services. A major initiative under way, for example, is developing a new identity management system for Northrop Grumman's 125,000 employees in an effort to reduce complexity, costs, and risks.

Another major project is integrating and consolidating the company's applications with the goal of having a single shared instance of SAP applications.

Northrop Grumman's collaboration and portal systems paid off. Recently, aircraft development engineers were able to work with engineers from the company's satellite group on a project using collaboration technology, Glennan said. And portal capabilities that made it easier for engineers to collaborate among themselves and work with outside partners was a key factor in recent contract wins on the U.S. Navy DD(X) destroyer program and the Pentagon's Kinetic Energy Interceptors program, according to Glennan.

Competency centers built around key technologies such as ERP apps, collaboration software, and product life-cycle management tools have been critical to the shared-services effort, he said. The company also has set up an operations council to identify ideas and best practices in the company's diverse business units.

Northrop Grumman maintains technology standards across all its business units. But Ken Lehman, group director of shared services, said it's important that those standards keep pace with changing technology and not hinder innovation. One way the company does that is to monitor the number of technology-standard waiver requests for IT purchases and one-off IT projects under development--signs a standard is becoming obsolete.

Glennan said he believes Northrop Grumman's shared-services IT approach can be scaled down to apply to smaller companies.

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