-KPMG MANAGEMENT CONSULTING: IT solutions not keeping pace with globalisation, claims KPMG

M2 PRESSWIRE-16 July 1998-KPMG MANAGEMENT CONSULTING: IT solutions not keeping pace with globalisation, claims KPMG (C)1994-98 M2 COMMUNICATIONS LTD

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IT solutions are not keeping pace with the trend for globalisation, according to KPMG Management Consulting. Speaking at a conference on Corporate Strategies for Globalisation organised by the Strategic Planning Society in London*, Graham Oates, partner with KPMG Management Consulting, claimed that many IT solutions are still geared around predominantly national-based structures, while their users are, increasingly, becoming truly global organisations.

"Many IT companies claim to offer 'global solutions'. But organisations frequently fail to consider properly the real meaning of 'globalisation'. Too often, 'global' is confused with 'multi- national' - having operations worldwide. In actual fact, a truly global vision must encompass not only worldwide representation, but also global branding, consistency of customer experience, worldwide knowledge management and fully integrated processes and systems. In order to achieve this, companies require IT solutions that are integrated and unified - responsive to local needs, but providing support to companies in developing and implementing global strategies."

However, Graham Oates warned, providing IT solutions for global organisations is by no means a simple operation. "First, IT companies themselves need to be globalised in their own structure and approach in order to understand and serve the needs of global clients. Second, they must concentrate on developing and offering strategic solutions designed to support global companies. These comprise a range of components relating to basic back-office applications, such as finance, HR and so on. But they must be integrated with value-added applications covering supply chain, customer management, electronic commerce, knowledge management and industry-specific needs. The challenge for IT solutions providers is to offer consistency of service, across all these different applications and across a large number of national operations."

Facing these difficulties, it is not surprising, Graham Oates commented, that globalisation of IT is not an easy matter. "When IT solution providers consider offering these systems, they may find it is not such a small world after all," he said. "For example, ERP (Enterprise Resource Planning) suppliers currently struggle to provide global solutions and support. This is not surprising, since they have to reconcile different languages and scripts, accounting and other business procedures, legislative and regulatory regimes and macro economic and political pressures. Then there is the issue of actually implementing the technical infrastructure and providing operational support. Suppliers are rushing to establish partnerships with each other as a way of solving this dilemma.

Partnerships with each other, or with other organisations, offer IT suppliers one way of developing global solutions. However, it seems that new technologies might also offer a key. "The Internet is already a vital aspect of many companies' approach to globalisation and it will rapidly increase in importance," Graham Oates said. "As a sales and distribution channel, as well as a source of information and knowledge transfer, the Internet is valuable because it is a ready made global network. However, it also offers more radical possibilities.

"For example, the future is likely to see the creation of 'virtual' global enterprises, using advanced telecommunications, knowledge management, and Internet technology. In the 'virtual' global organisation, location is unimportant. The hub of the company's activities could be based in London, San Francisco or Singapore, but the, organisation would operate worldwide because, crucially, local operators would have instant access to the same systems as head office."

Whatever the structure adopted for the organisation, Graham Oates concluded, globalisation is more a state of mind than a physical reality. "Companies can have offices in every company in the world and be able to supply the same, or similar, products to clients anywhere and still not be global," he said. "Globalisation is not merely a matter of reach - it is a matter of viewing the worldwide market as a whole, divided by customer segment, not by country, and having a unified structure, outlook and approach everywhere, The future will see only those IT solutions that recognise and support that attitude succeeding."

*Graham Oates was speaking at The Strategic Planning Society Conference on Corporate Strategies for Globalisation in London on 3 July 1998.

Notes to Editors

KPMG Management Consulting

KPMG Management Consulting employs over 1,000 professionals in 18 offices in the UK and had 1997 revenues of GBP 153million. KPMG is one of the world's largest firms of accountants and consultants, with 1997 revenues of US$9 billion and over 85,000 personnel, including over 6,500 partners, in 155 countries. The firm's international headquarters are in Amsterdam and it has offices in over 175 locations across Europe. In the UK, KPMG has around 9,100 personnel in 38 locations, with 1997 revenues of GBP 726 million.

KPMG Management Consulting provides services aimed at transforming business performance through the successful integration of people, processes and technology.

KPMG World Wide Web address: http//www.kpmg.co.uk

CONTACT: Graham Oates, KPMG Management Consulting Tel: +44 (0)171 311 8782 e-mail: graham.oates@kpmg.co.uk Louise Moore, KPMG Management Consulting Tel: +44 (0)171 311 8701 e-mail: louise.moore@kpmg.co.uk Nicola Gaunt, Marketforce Communications Tel: +44 (0)171 608 3222 e-mail: marketforcecomms@compuserve.com

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