A Simple, Global Ambition

When Esat Sezer joined Whirlpool Corp. two years ago, he was attracted to the appliance maker's global ambition: every home, everywhere.

Sezer realized from his experience at Colgate-Palmolive Co. how big a challenge awaited the company trying to build a common global business-technology platform to support that strategy. "Everyone can articulate that global capability today," he says. "How they are executing it makes the difference."

Sezer became Whirlpool CIO this fall, inheriting a strategy that's halfway through a four-year execution. The goal: lower operating costs by simplifying the IT architecture and creating an integrated, global technology platform and organization.

Whirlpool's technology strategy centers on running business processes wherever possible on SAP R/3, which it's implementing with IBM's services group using IBM hardware when practical. The idea --begun under Sezer's predecessor, David Butler, who retired in October--is that consolidating on one platform would lower IT operating costs, let business units share information more easily, and let the company coattail off the technology innovations of SAP and IBM.

The strategy requires major investments, particularly in retraining Whirlpool employees on SAP. It needs to deliver returns that make the effort self-funding by lowering IT operating costs through server, application, and other system consolidation. For example, Whirlpool is consolidating six generations of storage technologies on IBM's Shark storage servers, which should lower maintenance costs. The IT group has set a goal of a 5% annual productivity increase to fund the effort.

"Asking for more money from the business units and the brand P&Ls won't get you far," he says. "You've got to fund [the effort] by taking more costs out of the business."

Sezer has convinced his fellow executives that the shift is valuable enough that he gets to use some of the savings for training. He won't say how big a bill that is, but when Sezer was in India this fall, he asked several outsourcing firms what they spend on training. "There wasn't any company I met that matched what we're doing in investing in people," he says.

Sezer had experience with the SAP-IBM partnership at Colgate-Palmolive, where he worked for 11 years, including six in Europe and Africa. Colgate-Palmolive is farther along than Whirlpool: 95% of its sales come through SAP. CIO Ed Tobin is a believer in letting IBM and SAP be the IT innovators and owners, and Colgate-Palmolive staff become expert implementers. "In concept, we've outsourced all our R&D to SAP and IBM," Tobin says.

Volker Loehr, IBM's VP of the IBM-SAP alliance, says consolidation is a key strategy in a growing number of IT shops. Often, it's consolidation of SAP instances, as companies ditch a country-by-country approach for something closer to a single operating platform. "There are companies that have gone from 36 instances down to three," Loehr says.

Sezer also wants to do more global development to encourage efficiency: develop a packaged application in one country and deploy it in many. The challenge is to keep development tied to business needs, which can vary by region.

So Whirlpool has created "global development grids." Developers from each region are assigned to a business category--supply chain, demand chain, or administration--and link to an executive such as the CFO or VP of human resources and an IT exec. They're also assigned to regional implementation teams.

What's Sezer's big challenge for the next two years? To keep business leaders excited about consolidation and simplification by showing real returns, since it's the self-funding engine that keeps the effort moving. "No one will fund simplification for simplification's sake," he says.

It's hardly a simple goal. But neither is every home, everywhere.