Challenge Turns into Opportunity for this Enterprise Architect
Bill Branch, Vice President of Enterprise Architecture, Sprint Nextel
Bill Branch knew what was coming. As a seasoned corporate executive, he was well aware that mergers between global corporations are frequently predicated on potential cost savings.
So when the planned merger between Sprint and Nextel was approved in August 2005, he began preparing for the inevitable–empowering the IT team to find synergies related to the integration of the two companies. Specifically, the Sprint Nextel CIO, Dick LeFave, gave Bill the challenge of rationalizing the combined company application portfolio.
“At the very beginning, we gave our people confidence that we would move them to new areas and technologies,” said Branch, Sprint Nextel’s vice president of enterprise architecture. “This was key to gaining their buy-in to move quickly and help eliminate the applications that they were currently assigned to support. This also taught us how to institutionalize target setting and merger integration as an ongoing discipline and part of our culture. The early visioning and broad communication became a powerful organizational rallying cry as being a value-add to our customers, which gave a sense of accomplishment to our staff.”
And Branch’s team would need that “rallying cry” to achieve the expected synergy results.
“Our task to simplify the business encouraged frequent conversations between the IT leadership team and the customer leadership teams,” he said. “We were focused on running IT as a business. This included developing a comprehensive tracking mechanism and coordinating with the merger integration team, which acted as our investment banker. Subsequently, this has become part of our DNA, and we have applied the same principles to ourselves in other ways.”
There have been other lasting benefits as well.
Branch said his team has gained significant intelligence “on how to fund infrastructure investments such as target state architecture evolution (focus more at the domain level rather than at a project level). We utilized ‘a cost to achieve’ approach as an investment banking vehicle to fund our IT portfolio simplification. This taught us the value of payback on investment and demonstrated our ability to starve applications back to our board.”
The fact that the project was being driven by a merger created separate challenges and opportunities.
“With strong architecture planning and governance processes, Sprint Nextel was able to make significant progress in rationalizing our IT application portfolio in a short period of time,” said Branch.
“This enabled and, quite frequently, drove the business transformation at a pace that was only constrained by our ability to combine/interwork the network infrastructures. As a result, we were able to offer new products earlier and be more aggressive in other major growth initiatives, such as our WiMAX buildout, than what had been envisioned when the merger first occurred. Our application metadata repositories and scorecards assisted the business in decision making regarding application simplification and rationalization efforts.”
Likewise, strong governance processes over the IT architecture and project portfolio management enabled Sprint Nextel to ensure spending was constrained on applications identified as not target state and spending was allowed on applications identified as key components of the future IT portfolio. In the early days, the business transformation team expected to drive IT transformation, but soon began taking the lead from IT as transformation efforts quickly stressed the business’ ability to absorb change.
The net result? “Our IT organization has repeatedly been recognized by the CEO as the leaders of our transformation initiatives within the corporation.”
Branch, typical of a leader, is hesitant to take credit for a highly successful program, singling out three directors that were instrumental to the cause:
- Jeremy Anderson, director, Merger Synergy Achievement: responsible for the program management of synergy initiatives within IT to achieve the synergy targets within the operations and development organizations.
- Nancy Tracewell-Shawver, director, Transformation Management: responsible for IT organizational transformation, synergy communications, results reporting, and mitigation plans.
- Jeff Stovall, director, Integration Planning: responsible for the concurrent work of synergy achievement with the acquisition of several of Sprint Nextel’s affiliate partners and the resulting absorption into the IT application portfolio.
“These directors ensured that the greater IT organization planned for and achieved the promise of the merger,” Branch said. “Through planning, project management, monitoring, and sponsorship, they enabled the larger IT enterprise to reduce the overall IT budget within a two-year period, which helped IT meet the run-rate reduction in two years, rather than three.
Branch was also careful to credit the entire team for its effort, noting that every development team within IT, including outsourced providers, contributed to the work effort.
Looking back on the project, Branch says it is easy to link the outcome to the business strategy.
“All of our IT synergy achievement efforts directly supported the corporate objective to meet or exceed synergy targets and are further clarified in the IT strategic objective as ‘Achieve merger synergy targets by execution of initiatives addressing IT operations, billing, and application rationalization.’
“The business case for this initiative was created at the overall corporate level over a three-year period, with an assignment of costs and targeted savings to various organizations (IT, sales, marketing, finance, etc.). By achieving the targeted savings early, IT was able to fulfill its committed savings in a two-year period.
“Since these savings were achieved through application rationalization efforts that resulted in a 20 percent reduction in number of applications in use across the enterprise, the application portfolio management is greatly facilitated. Additionally, IT’s best practices were applied to evolve the application portfolio to be more consistent with our architectural standards, principles, and best practices.”
The experience may also have a lasting legacy, according to Branch.
“The best practices put in place to achieve these synergies as a result of the initial merger have now been leveraged again and again as Sprint Nextel has acquired seven of our affiliate companies.”
Holt Hackney is the managing editor of Architecture & Governance Magazine.