Going Global

Portals Power VW
Two major portals help Volkswagen AG produce 5 million cars a year at 40 factories in 16 countries. "This is a core element of our borderless enterprise," Meike-Uta Hansen, director of eSupply Chain Integration and Services, said at the InformationWeek conference last week.

A procurement portal, called the Integrated Purchasing Agent's Desk portal, gives buyers comprehensive data on suppliers, parts, and projects. Designed for purchasing agents, the portal is being used by most parts of the company, including research and development, quality assurance, logistics and production, and finance. A supplier portal, which features 30 applications, links to 16,000 supplier sites and has 55,000 users. Said Hansen: "It's now a deep-seated part of all of our business processes."

-- Paul Travis

Break Down Fiefdoms

Are you a "legacy person"? The answer is probably yes if you've been in the same job for three or four years, which means you're unlikely to innovate because you're protecting the systems or products you helped create, Robert Herbold, author of The Fiefdom Syndrome (Currency, 2004) and former chief operating officer of Microsoft and CIO of Procter & Gamble Co., said at the conference.

He encouraged managers to fight legacy thinking, break down fiefdoms, and support creative thinking by looking at creativity and discipline along a spectrum, where activities such as product development and marketing need a lot of creativity, and activities such as procurement, human resources, and IT need a great deal of discipline. Breaking fiefdoms is a task that's never complete, because the personality traits that lead people to create fiefdoms never go away. Said Herbold: "There's something wired in human beings that make us do these things over and over and over."

-- Chris Murphy Global Brands And Local Drinks
Diageo Inc., a U.K. supplier of premium alcoholic beverages in more than 200 countries, faces the challenge of developing global brands while serving local markets. The company has grown through a series of mergers and acquisitions and is working to standardize IT systems worldwide, including an enterprise-resource-planning system from SAP that Diageo spent $100 million to deploy in North America.

But the company has to be sensitive to local rules, regulations, and cultural issues involving alcohol, said Barbara Carlini, senior VP and North American CIO. "Finding the right balance between global and local can be difficult."

In some Middle Eastern countries, it's illegal to visit a Web site that promotes alcohol. Other countries are much more liberal. To deal with those differences, Diageo is careful about its marketing messages and who can access its Web site. "One person making a mistake that could be viewed as marketing to children can cause us a lot of problems," she said. "We have a tough, self-imposed policy to control those kinds of things."

-- Paul Travis

Three Principles For Global Operations
UPS Inc., the package-delivery and logistics company, spends more than $1 billion a year on IT. But technology has less to do with the success of its push into new markets than three key principles, CIO David Barnes said.

The first is integration rather than extraction. Successful companies don't "take incentives and then leave when the going gets sour," he said. UPS's second principle is to localize its global operations in ways that adapt to and respect local communities. UPS's third principle is to build a culture of trust in the countries it enters. In China, that involves recruiting and training Chinese nationals studying at U.S. universities to learn the ins and outs of UPS's U.S. operations and then return them to work in the company's China operations. UPS also has a management-training program for Chinese nationals in Singapore. "We take a lot of pride in saying that business drives technology," he said. "We build a global network so our customers don't have to."

-- Elena Malykhina