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Spin Off 07/23/2010

Posted by TBoehm30 in Project Management.
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How does a company chop it’s IT in order to spin off and sell a part of itself?

I just read an excellent article by Mike Gorsage from Tatum about Integrating IT for Mergers and Acquisitions.  In the second half of the article he talks about “Planning for Separation.”

 This got me thinking about when I was consulting with Agilent as they were getting ready to split the company and sell part of it to Philips.  Agilent had just recently split from HP and some of the IT was still, unofficially, shared.  While HP and Agilent were two different companies, there was a shared culture that allowed people to communicate easily.  People at Agilent had come from HP and were comfortable with how things worked there.  Now some of them were being ‘sold’ to Philips and it had to change.

 Agilent had to figure out what IT the new company would take with it.  Some hardware and software would have to be duplicated, some would have to be given, and some would not be part of the sale.  They had to figure out the same thing with the IT team; however it is much more difficult to duplicate a person.

 I was working on their CRM system for the call center dealing with medical machinery.  HP/Agilent (now Philips) produced monitor type equipment for hospitals and doctors.  When the equipment had problems, they called the response center in Atlanta.  The call center would specifically be part of the sale to Philips.

 The CRM system, Clarify (now owned by Amdocs), was highly integrated with the back office system.  Corporate Agilent decided that the back office system would not be part of the sale.  Since Philips and Agilent, along with HP, are competitors in some arenas, the new company could have no access to proprietary data.

 That meant we had to get all of our data off of the old system, into a new system on a very tight timeline.  We had to update our CRM system to integrate with SAP instead of the old HP system.  With the help of some very smart people, we got the CRM system up to speed within our timeline and on budget.  We figured out how to download master data from SAP: the customers, contacts, products, and contracts.  We figured out how to send back to SAP the data it needed for tracking, billing, etc. 

 During the building move we managed to move all of the hardware over the weekend, so barely anyone knew it happened.  The call center is a 24 by 7 operation, so it had to be done carefully and quickly.

 The biggest problem turned out to be migrating data from the back office system to the new SAP system.  The contracts in the legacy system were confusing, not standardized, and big.  Agilent had a large team of people who came up with a plan to pull the data, clean it up, and then put it into SAP.  It would take weeks of processing the data after it was pulled, to clean it up enough to get into SAP.

 Agilent set up the deadline of when to be out of their system.  If the new company missed that deadline and needed continued access for another month it would cost Philips a lot of money.  We missed that deadline and had to extend.  Agilent doubled their fee the next month and would have doubled it again had we needed another month.

 By that time, I suppose, someone decided enough was enough, and called it done.  We had enough data to proceed and make it work.  Since I was not involved directly with old back end system, I have no idea what data we lost.  I can only imagine it was significant.

 With the new company complete, we worked on better integration with SAP, the politics of the new culture, and improving the call center.  Philips had bought several medical companies that would join us and we had to integrate them next.

 Most of the companies’ call centers were moved into our building and so we eventually shared the CRM system with them all.  We shared the phone system, and the other infrastructure that allowed us connectivity to the internet, intranet, and each other.

 Philips wanted everyone to use SAP in the call center.  We quickly did benchmarks and comparisons to show corporate how much extra it would cost to get rid of the current CRM system.  They acquiesced, at least temporarily, to allow the legacy system.  Their idea was still to get rid of it, and that theme was seen in numerous meetings.  We managed to continue the use of Clarify, even against the wishes of some big-wigs at Philips IT.  Eventually it was expanded to other countries around the world.

 The thing that Philips did right was allow the best technology to continue being used, and even invested in its future.  While they had alternate plans, the old systems worked well and could not easily be changed so they didn’t change it.  Their alternate plans were shelved, and new plans created to better the company as a whole.

 Philips had the people who understand it’s a global world out there and Technology makes it happen.

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