Considering the business forecasts, FCI leaders understood that IT budgets were not heading for a leveling—
and certainly not for any increases—in the foreseeable
future. Through an evolution of cognitive processes in a
concerted program of cost-cutting efforts, IT’s leadership
Rather than approaching yet another round of budget
reductions as an obstacle to sustaining or improving IT
services, the leadership looked at the cuts as an opportunity to provide innovative IT solutions. Heading into the
latter half of Year 2 budget reductions, the leaders developed a five-year budget and strategy plan that incorporated
annual reductions along with an innovation strategy that
included additional business functionality, increased service levels and greater flexibility in IT delivery.
telephony budgets at that time, it adopted the responsibility to slash costs. The piloting of voice over IP (VOIP)
telephony helped determine the feasibility of a global
rollout and cost benefits.
The data center consolidation was completed with a
single global data center in the United States, along with
a secondary development/disaster recovery center. Data
storage technology was standardized and consolidated
from three solution providers down to a single vendor,
EMC. Attention then turned to the consolidation of
physical servers with VMware virtualization technology.
Further restructuring of personnel reduced the need
for regional management layers, and the organization
became a truly global structure.
YEAR 3: After two years of budget cuts and increased
demand on the IT organization with the introduction of
a global data warehouse solution from SAP, further reductions were needed, including deep cuts in IT personnel in
the U.S. operations. Leadership’s response was to establish
a captive IT center in Bangalore, India, to balance resource
loss with lower operating budgets for application development and support.
Infrastructure and service delivery (help desk) were targeted for additional cuts, but with a new solution: WAN
restructuring with a single global provider, Orange, and
reorganizing the service desk to operate as a global team
with follow-the-sun practices.
YEAR 6: An external cost analysis firm recognized the
organization as “best in class” in cost management.
Although IT no longer had to make reductions, it set a
reduction target with a commitment to a multiyear vision
of innovating with cost cuts.
After several years of increasing demands for services,
coupled with annual reductions in personnel, the organization restructured as a single IT entity, eliminating regional
boundaries and formalizing a global structure to remove
any remaining functional silos operating across regions,
countries and divisions.
Success with the VOIP pilot the previous year led
to the implementation of VOIP across 40 percent of
the high-telephony-cost sites, with open-source IP PBX
YEAR 4: Increasing pressure on IT continued to inspire
leaders with the demand for significant company restructuring. This included plant closures in high-cost countries, new facility startups in low-cost countries, a shifting
in manufacturing operations, and a renewed push for
advanced online presence and e-commerce capabilities.
As previous reductions exhausted the ability to reduce
personnel even further in the United States, FCI cut contract personnel in Europe, shifting services to India and
doubling the size of the Indian operations. Consolidation
of operations took center stage, with three regional data
centers (Americas, Asia and Europe) slated for consolidation into a single global data center.
Remote-access technology was replaced in order to
eliminate high-cost, token-authentication technology with
a certificate-based solution from iPass; Secure Sockets
Layer (SSL) VPN technology was implemented with Web
meeting capability; and WAN compression technology
from Juniper was implemented to reduce data network
costs as bandwidth demands increase. (At the beginning
of 2010, the Juniper solution was replaced with Riverbed
How do you benchmark intelligence?
YEAR 5: Along with continued business restructuring,
globalization put additional burdens on IT. The implementation of a global product data management system
increased service demands across applications and infrastructure teams.
Also, although the IT organization did not own the
BASELINE JULY/AUGUST 2010