By Baselinemag  |  Posted 2006-11-06 Print this article Print

Identifying core processes and centralizing tech decision-making are among the keys to success.

2. CENTRALIZE Decentralized decision-making is a corporate catch-phrase, but for small-company I.T. departments it can be a dangerous strategy. The gaming company Churchill Downs (2005 sales: $409 million) used to let each of its five racetracks and its television unit buy technology independently. As a result, its I.T. department ended up having to support three different operating-system platforms—Microsoft, Unix and Linux—and a half-dozen wide-area networks. Jay Rollins went about changing this after he joined Churchill Downs as vice president of information technology in June 2004. "We weren't really leveraging the size of the company on vendor management purchasing," he says.

Rollins standardized on two vendors: Microsoft for computing and Verizon for telecommunications. The Microsoft decision was strictly pragmatic: Microsoft expertise was readily available near Churchill Downs' home base of Louisville, Ky. The Verizon decision was more explicitly economic: By offering the company "a full book of business," Rollins was able to negotiate a discount and save about $600,000 a year.

Another mid-size company that has found a way to centralize I.T. is Installed Building Products, a privately held subcontractor that sells and installs insulation, garage doors and other products and has offices in 29 states. Every time Columbus, Ohio-based IBP buys another company, it inherits another computing environment. The acquired businesses generally aren't big—some have as few as 20 employees—but CIO Marty Luffy says, "You have the same set of problems you'd have at a big company, just on a different scale."

Unaddressed, the differences in systems—especially for financial controls—would make it hard for top management to be certain how the company as a whole was doing. So every time IBP buys a new company, Luffy dispatches a team of two to three I.T. workers who install IBP's core database system (it's based on Microsoft SQL) and stay around to train the new company on using it.

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