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While other companies decentralize, Tiffany CIO Davidson keeps a tight rein on IT
Many modern businesses are happy to operate in as decentralized a manner as possible. Call centers get shipped to India. Programming tasks are handled by coders in Russia. Manufacturing is so decentralized that parts and pieces for a single product may come from every corner of the globe. To be sure, there are benefits to this model--by taking the little details off their hands, companies are able to focus on core strengths.
At retailer Tiffany & Co., CIO Robert Davidson's strategy involves centralized control, keeping a tight grip to ensure not only the legendary quality of its products but quality of service and high internal efficiencies, as well. It's a strategy that's already working. "I'm always optimistic," Davidson says. "Sales are up in a harsh economy, even though luxury items are usually first to go." Tiffany's sales were $430 million in its third quarter, up 18% year over year.
Davidson has standardized business technology at 137 stores.
Photo of Robert Davidson by Dominic Episcopo
One way Tiffany has kept a stern hand on the rudder is by centralizing IT, both physically and strategically. A newly constructed campus in Parsippany, N.J., is home to all of the company's 220 IT staffers. The company has standardized its IT across 137 stores in 17 countries, letting them connect and control systems via a frame relay network.
It's a model that wouldn't have worked if Tiffany also hadn't begun to centralize its customer view, taking a best-of-breed approach to software deployment. The company made its customer databases accessible to everyone in the business. In the coming year, Tiffany will continue to emphasize the construction of this single customer view, creating a master database and dashboards to provide better data.
Tiffany is also centralizing manufacturing. It makes internally half the jewelry it sells, and it's shooting for 70%. Last year, Tiffany invested in a diamond mine in Canada, a move that has as much to do with better control of the supply chain as removing ethical problems of harvesting diamonds in war-torn Africa.
There are a few clouds. Davidson is concerned about the merger of PeopleSoft Inc. and J.D. Edwards & Co. because Tiffany uses PeopleSoft's HR apps and J.D. Edwards' financial and other apps. He also worries about how consolidation in the telecom industry could cause confusion. In general, though, Davidson expects the year ahead will be a good one for Tiffany and for the technology sector. "IT is still a good career," he says. "Companies will depend even more on technology in the future. There's just more emphasis on the technology people being business oriented."
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