Tyre manufacturer Pirelli conjures up many images, from fast cars to racy calendars. But few would associate it with public telephone services. Yet in 2001, as news of Telecom Italia’s troubles circulated, Pirelli’s CEO, Marco Tronchetti Provera, saw a long-awaited opportunity to invest in telecommunications. A $6.4 billion buyout of a big stake in Olivetti, the holding company that controlled Telecom Italia, secured a deal.
The acquisition also acted as a catalyst for executives to re-examine Pirelli’s own infrastructure. Both companies used business planning software from SAP, but in many separate instances such as in Telecom Italia’s Mobile and Internet divisions.
“At the time of the acquisition, Telecom Italia was very fragmented,” says Luca Negri, Pirelli’s enterprise application integration (EAI) competency centre director.
That fragmentation, along with Pirelli’s growth, led to the creation of a central unit to rationalise the businesses’ entire IT infrastructure, the Shared Services Centre.
At first, integration was approached on a project-by-project basis, continuing its previous use of integration tools from Tibco Software, along with a team of consultants.
Initial projects, such as the rationalisation of international tyre ordering systems, took months to complete. But as internal staff gained more experience and training, the Shared Services Centre took control of integration projects, allowing the business to make rapid and cost effective additions to the application infrastructure.
“We see the whole integration layer as a project in itself, a living thing that moves to fit the business requirements,” says Negri. This speed of integration work lets the business keep pace with market changes.
Like other IT services such as email, EAI is now taken for granted. “The company knows that if there is a fusion between companies or if something changes, we will be proactive,” he says. Business people can now evaluate integration costs themselves.
Negri says this CEO-led strategy to establish a horizontal centre of expertise across the enterprise shows how, in the post dot com era, technology is being used not to add new functionality but to streamline operations. “We are minimising our costs and maximising our expertise.”