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The strategic benefits of quick IT integration

Corporate
Corporate

MILAN

On June 11 2018, just five days after the announcement of the completion of General Cable’s acquisition, employees around the world opened up the company intranet and saw a common landing page.

In many acquisitions, management and bankers focus on getting the deal done and then turn to integrating IT systems as an afterthought. With Prysmian and General Cable, the IT department was brought in during the acquisition process along with the business consultants that were combing through General Cables’ accounts. While consultants crunched the numbers, the IT department began mapping the maturity of the two future partners’ respective computer systems.

"Prysmian’s top management is very committed to the IT integration process, and has increased its budget for it, because of it has seen the benefits in past experience,"

Marcelo Petenao

Prysmian Group head of IT Integration

Thanks to Prysmian’s experience when it acquired Draka in 2011, the Group is now able to meet the challenge of IT integration with General Cable with a full awareness of the strategic role of information technology in harmonizing the data processing functions of the two companies successful from the start. With Draka, the experience of harmonizing the two companies’ IT systems took five or six years. With General Cable, Petenao and his team plan to cut that time to three years.  

The strategic benefits of IT integration are twofold. The first is in cost reduction from synergies. The second is less tangible but no less important – cultural integration of different ways of doing business.

“IT systems are a sort of meta language,” he said.  “When you harmonize them, you force the organization to speak the same language.”

The importance management is placing on IT integration is reflected in the amounts allocated by the board of directors to the project.

“We can say we are doubling our IT portion of capex,” said Petenao. “That’s because there are three advantages to putting Prysmian and General Cable on the same computer system: you reduce costs, you speak the same business language, and you can share best practices.”

Increased IT spending up front will help save costs down the line, and help the entire company achieve its goal of operating synergies.

The integration plan calls to move Prysmian and General Cable’s computer systems onto a single Systems Applications and Product in Data Processing, or SAP. A SAP governs pretty much everything a business does on its office computer system. When the IT integration plan is competed, every office in every country in the world from China to Australia to Chile will run on a single SAP, enabling all of the business and product units to work from a single data base.

The IT integration of Prysmian and General Cable will keep Petenao and the Chief Digital Officer Stefano Brandinali and IT HQ / local teams busy for many months to come. And it will be more complicated than past harmonization because this time around they will be updating the SAP in the United States by adopting the new SAP platform S/4 HANA, the new “intelligent generation of ERP,” at the same time they are integrating with General Cable. If they didn’t, they would need to start the overhaul of the SAP after integration was completed.  

Prysmian Group believes that  to best  deploy  its expertise, it needs to have a solid and replicable base.  So the hard work now is worth it.

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