Like many companies, FedEx used to build lots of systems specialized for single functions, such as customer service, with their own applications, hardware and databases. FedEx had been running decades-old software and hardware, including a networking architecture built in 1974 and a descendant of 1979-vintage airline transaction-processing software. "We had one or two of everything," Humphries says. The company also had to keep IT staff who knew how to care for the relics. He declines to say whether the company will reduce staff as it shuts down old technology. But he notes that private clouds of virtual servers and software let the average IT staff member support several business areas.
GE understands the ill effects of too many applications or other forms of complexity, which increase costs and slow the business down, Begley says. It has acquired at least five companies since 2010, all of which came with IT systems that had to be turned off or migrated. The energy division alone accounts for five recent acquisitions, including one company that brought in 39 ERP systems, Begley says. GE signed two more deals recently, which it's expected to close later this year.
Before Begley became CIO in 2010, GE had no formal time frames for integrating a typical acquisition, she says. "We said, 'Not OK.'" IT will make no headway in simplification if integrations languish, she says. Now, GE is working toward establishing a rule that it has to be done within 18 months. "That's enormous in this company."
Begley has also assigned 1,000 people to refine business processes as part of a project called GE Advantage. "This is about killing complexity. As you do, you get faster. You have speed, lower cost and the flexibility to go faster," Begley says. "It's about competitiveness."
Plan of Attack
Read the mission statements of 100 companies and at least 75 will mention simplicity, says Ron Ashkenas, senior partner at Schaffer Consulting. "We've talked about it for thousands of years. Leonardo da Vinci talked about it, the ancient Greeks talked about it," he says. "But doing it is another thing."
First, CIOs must enlist supporters with pocketbooks, says Ashkenas, who wrote the book Simply Effective: How to Cut through Complexity in Your Organization and Get Things Done.
You might appeal to their sense of doom, or as Begley puts it, to "what matters." For the CEO, it's missing new business because the company is freighted with plodding, confusing technology that costs too much to maintain. For the board of directors, it's managing a crisis after a big security breach is traced to vulnerabilities in systems that aren't fully understood.
When Begley described her simplicity plans to GE's board, she explained that a simpler infrastructure is more secure and easier to protect. "When we have incidents, typically, the root cause is some type of complexity," she says. "Cybersecurity is something our board cares a lot about. Our company's reputation is at stake."
Sign up for CIO Asia eNewsletters.