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Ears To The Ground

By Larry Dignan  |  Posted 2005-03-08 Print this article Print

Former GM chief technology officer Tony Scott has moved over to Disney. Where will he steer the systems inside the magic kingdom?

Tony Scott has traded in his wheels for mouse ears.

With no fireworks, the former chief technology officer at General Motors became chief information officer at The Walt Disney Co. last month. His mandate: Take responsibility for all information systems at Disney's various businesses, including cable and broadcast networks, movie studios, and theme parks and resorts.

Disney's appointment of Scott may mean the company is focusing more on internal operations and technology sharing, says Michael Useem, professor at the University of Pennsylvania's Wharton School. "In general, companies have moved to shared services over the last decade," Useem says. "It would make sense if Disney moved in that direction."

Scott wasn't available for comment. Michelle Bergman, director of corporate communications at Disney, confirmed Scott's arrival and role.

The addition of Scott from GM may presage a move toward "shared services,'' a model where functions such as financial reporting and employee support are centrally provided. Then, the divisions can add on services to support their particular needs, such as ticket processing.

Whether Disney has moved toward shared services is unclear. The company has barely mentioned technology projects in its Securities and Exchange Commission filings. Disney did consolidate its finance information systems on SAP R/3 and some of its human-resources apps on SAP during the last two years. Many of Disney's high-profile projects are focused on improving customer relations.

"The company has an executive just focused on synergies between divisions," says Jeffrey Thomison, an analyst at brokerage Hilliard Lyons. "I'm not sure how much of that synergy effort is focused internally. With Disney's divisions, there may be few similarities between them."

Enter Scott, who along with GM chief information officer Ralph Szygenda, digitized the design, production and delivery of automobiles. Whether Scott can parlay his GM experience into success at Disney remains to be seen. But analysts say his challenges are clear. Among Scott's hurdles:

Management upheaval. Two of Scott's bosses, Disney CEO Michael Eisner and chief operating officer Bob Iger, may have limited tenure at the company. Disney has set a June deadline to name a successor to Eisner, who has been panned for the company's corporate governance structure, dragged into a lawsuit over former president Michael Ovitz' $140 million severance package, and been the target of Disney War, a book detailing Eisner's reign.

According to Thomison, Iger is likely to become CEO, but Disney will look at outside candidates. "I wouldn't rule out a surprise ending," he says.

Thomison says the best case for Scott would be to have Iger named CEO to provide continuity. If an outsider is named chief executive, Iger would probably resign and there would be a lame-duck period as long as 15 months until Eisner's contract is up in September 2006.

Fiefdoms. Management support will be important since Scott will have to deal with multiple chief executives in charge of Disney's units.

Indeed, the list of executives Scott will work with—Andy Bird, president, Walt Disney International; George Bodenheimer, co-chairman, Disney Media Networks; Bob Cavallo, chairman, Buena Vista Music Group; Richard Cook, chairman of Walt Disney Studios; and James Rasulo, president, Walt Disney Parks and Resorts—is long.

Meanwhile, each unit operates individually. Thomison says the hurdle will be to get Disney's divisions to work together. "There's a good bit you could do beneath the surface to make the company more cohesive," Thomison says.

Standardizing applications. Assuming Scott gets Disney's divisions in a row, he'll need standard applications that can still accommodate the different needs of, say, Disney's feature animation studio, resorts and ESPN.

"It's going to take leadership to overcome resistance to new systems and processes," Useem says.

Nevertheless, Scott won't likely be daunted. For starters, sharing internal operations such as information technology and human resources is the norm today for multibillion-dollar companies.

The other feather in Scott's cap is that the tasks before him at Disney are similar to what he had to do at GM —get divisions to collaborate, standardize applications and outsource what wasn't important to the business.

"It's not like GM wasn't a complex business," Useem says. "GM may be cars and Disney may be entertainment, but both are equally complex and have the same issues."

Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET News.com. Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.
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