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For someone who is vital for the running of a company spread
across 3,500 locations in over 150 countries, Nigel Underwood is modest and
simple. "I am happiest when I am at home with my family," he says.
But, any CEO going for a major M&A would like to have Underwood in his
family. The reason is pretty obvious; Underwood is what one could call the integration
man. In fact, he came to the current company through an acquisition.
Today, Underwood, CIO of DHL Logistics, has successfully
integrated Exel, his former company, into DHL. Before the current M&A, Exel
had acquired Tibbett & Britten and Underwood had integrated the two as well.
In fact, during his short tenure at Exel, he was at the helm of IT systems,
through more than fifteen M&As. Before Exel, Underwood spent his early IT
career in the fast-moving consumer goods industry, working with brands including
Boots, Mars, and Coca-Cola Schweppes. Prior to joining Exel, Underwood was
senior VP, IT, Hilton Group. Little wonder then that he is widely respected and
was recently voted amongst the top 5 CIOs in the UK.
This football aficionado (Underwood is quite proud of being an
associate director of Lincoln City football club) leads a team of 2,300 people
and has data centers in the UK, Prague (Czech Republic), Malaysia, Singapore,
and the US and ensures that the systems at DHL are well-oiled all the
time. His top wishes: to see the Taj Mahal and be with his family at the
upcoming Beijing Olympics. In an interaction with Dataquest, Underwood shares
insights on the changing role of the CIO and what it takes to be an integration
man. Also, he talks about all the things that matter to modern-day CIOs and
why they should matter. Excerpts.
According to many, the biggest challenge for a CIO is the
integration of disparate IT systems post an M&A. What according to you are
the challenges involved?
The challenges are plenty. I had done around fifteen integrations at Exel
and now am working at integrating Exel into DHL. But there are few basic things
that one has to keep in mind at the very onset. First, one needs to list down
clear business objectives for the acquisition. This is a good starting point to
understand business priorities and requirements. One of the big challenges
during a large integration is that the customer should not be affected, At all
the times one needs to maintain a high quality of service, even as the
integration is being done.
Once the business priorities are in place, the idea is to move
with speed to integrate quickly. To do this, people are key piece of the jigsaw.
Establish a core team and assign new roles. This team will drive the whole
process. So when DHL acquired Exel, a team of 100 people from both the companies
was put in place to ensure a smooth transition. In the next stage, one needs to
find synergies between companies, look at avenues of cutting costs, network
businesses together, ensure that the infrastructure networks are aligned, and so
on. All these are done through multiple projects that run in tandem.
What is the current state of integration of Exel into DHL?
When we had started out in 2005, we had set a three-year roadmap for
integration. I am happy that we are quite ahead of the schedule and there would
be no more integration projects in 2008. Thus, we will complete the integration
in two years, rather than three. We had anticipated a bumpy ride, but it wasnt
really so.
What role does IT play in the whole integration process?
IT plays a very crucial and important role. Most of the acquisitions are
done for people and know-how, as much as they are done for scale and financial
reasons. It is imperative that the two entities are integrated intelligently;
there should not be anything left in silos, as it would destroy value. With the
integration of Exel, we acquired capacity and filled a few product and
geographic gaps. Today, DHL Logistics is spread across 3,000 sites in over a
hundred countries. IT plays a big role in bringing consistency in such a diverse
organization. For me, it is a big challenge to create and drive common culture
across the company. When the whole process started off at DHL, we are creating a
global IT operating model to ensure that services run on a degree of certainty.
My team drove around 930 projects from 2006-07 from the IT perspective. Thus,
that would give you an idea of how important IT is to the whole integration
process. Page(s) 1 2
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