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Information Age (IA): One of the major themes of IT in recent years has been consolidation. Mostly that has meant centralisation, but the character of Manpower's business has called for a more subtle approach. What structure have you been putting in?

Rick Davidson (RD): Manpower is a highly decentralised organisation. It operates in 67 countries, each with its own IT operation. Some are mature, robust IT operations - France, the UK and the US - others might only consist of 10 people. Historically, there was very little collaboration taking place between the IT operations of different countries.

As a result we had many, many bespoke applications - approximately 600 unique applications to run our business around the world - and we had lots of redundancy, for example, we ran nearly 70 different financial applications.

IA: Did that structure stem from years of growth through acquisition?

RD: Not really, it stemmed from our model. In this kind of services industry, the authority needs to lie in the countries where business is transacted with the customer. The last thing you want to do is require decisions to be made at the central office or corporate headquarters. It makes the company too slow to react to changes in the [employment] market. There is a lot of autonomy out in the individual countries, and as such they had their own IT operations.

Two years ago the CEO of Manpower, Jeff Joerres, recognised that there was much more value we could get out of the IT function, not just in cost savings but through collaborating more around the world in support of our global and local customers. He asked me to come up with a model for the IT operations that would allow us to better serve the local markets but realise some cost savings globally at the same time.

We looked at four organisational models for IT. Completely decentralised, which is more or less what we had when I started in 2003. The opposite approach, to centralise everything, which was never going to work in an organisation as distributed as Manpower.

Another was a federated model involving loose collaboration that leveraged some of the infrastructure, and basically is used by conglomerates where there are sufficient differences between the processes of their businesses that it makes no sense to try to consolidate the applications that run the company.

A further model is what we call 'global-local' - and that is the one we eventually went with.

That is where we leverage and consolidate what is common or what can be made common on both the infrastructure and the applications. But at the same time we recognise there is also the need to have some local autonomy. These units still need to be agile, they still need to be able to move quickly, so we still have some individual applications and development taking place out in the countries.

IA: Can you describe the scope of the operation that the global-local model is being applied to?

RD: We are in the process of consolidating the infrastructure. Around 25 of the countries have what might be called a data centre and we are reducing that to three. We are also about halfway through the process of deploying a single data communications network around the world with British Telecom.

As it turns out, a lot of the front office processes in the branches - the way we recruit and induct temporary workers, how we place candidates with customers, and so on - are very similar around the world. The only things that drive differences are the statutory requirements on managing workers. So we have tried to consolidate here and have just started deploying a common front-office application around the world - a bespoke, internally developed application.

We are also implementing common financials and common HR based on PeopleSoft applications. We have tried to implement common payroll and billing systems, but it has not been easy due to the complexity of local legislation.

So, while there are countries where we can use PeopleSoft, we still use regional specialist packages - IFS for payroll in Sweden and Sage products in many smaller country operations, for example.

Our view is: If our business processes at units around the world are about 80% similar, then we will pursue a common application; where they are less than 80% similar, we'll very likely pursue a local and unique application.

IA: How has that helped tighten issues of IT governance?

RD: What we have done in IT is try to create a single community of IT professionals. Even though we have IT functions in multiple countries, we wanted to have a single set of governance processes.

So we have developed the 'Manpower Way' as an encapsulation of all of our IT management processes. It covers project management, resource management, financial management, portfolio management. And since April 2004, we have used Niku's Clarity as the enabling tool to support those governance processes.

The Manpower Way provides the guidelines for how we want to run IT around the world. While we may be developing and delivering different products in different countries around the world, we do it the same way, with the same rigour and with the same level of financial analysis.

If you are a decentralised organisation of 1,200 IT people like Manpower, you need a strong set of governance processes if you want to have any chance of having an efficient organisation.

Those processes give transparency into what is going on. Not just to me, but to the people that have responsibilities for IT - the business leaders and others. The processes also help provide the ability to know what to do to effect a change - which control levers to pull. Lastly, they provide instrumentation to see if the organisation is getting the desired effect.

IA: Have these transformation and governance initiatives required major new funding?

RD: Over the four or five years, we are talking about $100 million investment. But that is not any more than we are already spending. It is just a more focused investment. We have been able to fund some of the investment with savings. For example, by replacing the incumbent telecoms providers in each country with the global contract with British Telecom we have cut our telecommunication costs in half, saving approximately $10 million a year - and getting higher bandwidth for our 4,000 plus branches.

We are also being able to redirect the investment that was going into the purchase and support of many redundant applications. We certainly will be able to cut that applications portfolio in half over the four years.

IA: How widely have you used technologies to improve IT governance?

RD: We are using the Niku software for resource management first then we'll apply it for project management. We don't have all the instrumentation systems in place yet, but in any case we don't want to use those to bring all the IT decisions back to the HQ 'mothership'.

I would rather the tool is used by people in the business units to view how their IT operation is running and use it to manage their own operations. And in that context, I've been pleasantly surprised at just how easy to use, how intuitive the Niku product is.

When you start to pull some IT functions out of the countries and put them back into a common IT function, there is a sense that those business units might lose a little bit of the visibility and control. And we have absolutely no intention to do that.

In our company, the business units need to set the priorities on IT spending on major projects. This is not the thing the CIO should do. The CIO should be at the table and help make the decision, but not do it unilaterally.

That is where the project portfolio management capabilities come in. The CIO works with the countries to set the priorities, and sends out a monthly advice that says, 'this is where your money is being spent'.