American Power Conversion (APC) is one of the world’s leading manufacturers of uninterruptible power supplies (UPSs), those devices that provide backup power to computer systems in the event of a power outage. Its products range from small devices intended to support a single PC, to huge industrial systems that would supply vital installations like data centres.
As befits a company with a global presence, it has manufacturing sites all around the world including three in Ireland. The biggest of these is in Galway, on a site that for years housed the Digital Equipment Company.
However, as is becoming commonplace with multinational sites in Ireland, the focus is shifting away from pure manufacturing to the provision of other support services that are vital to the company.
APC’s global IT resources are headed up by a vice president and CIO who is based at headquarters in Rhode Island. Directly below him the pecking order are IT directors, each with a specific area of responsibility, who are located around the globe. Five are in North America, with one each in Asia and South American. It says much for the changing emphasis at the company’s Galway plant that no fewer than three IT directors are based there.
Eugene Maxwell is one of them; he has responsibility for all the company’s manufacturing related IT activity in the EMEA region. Another, Pascal O’Neill, is in charge of enterprise data centres and a third, Tom Higgins is IT director of sales and marketing.
‘The fact that there are three IT directors here is a sign of how successful we have been in making Ireland the alternative site to the corporate headquarters,’ said Maxwell, ‘and that’s the way manufacturing is going in Ireland. We can’t compete on costs with the likes of Asia and Eastern Europe, so we have to provide other high-value services.’
This is not to say there is no more manufacturing taking place in Galway. On the contrary, the manufacturing plant makes APC’s top of the range products for customers around the globe. However, Maxwell points out that about 90 per cent of the company’s products are now built in Asia, which forces the company to take a global approach to its business.
The way it deploys IT is no exception. ‘Our approach is based on two documents produced by the Working Council for Chief Information Officers in the US,’ he said. One is called ‘The Economics of Global IT Standards’, the other is called ‘Executing Global IT Standardization’.
These are essentially Best Practice documents aimed at manufacturing companies whose operations are dispersed around the world. As APC has manufacturing operations in China, India and the Philippines, Switzerland, the US and Brazil, as well as its three sites in Ireland, it certainly qualifies on that score.
‘These documents basically help us to avoid mistakes that other people have made,’ said Maxwell. He points to a set of guidelines in one of the documents that summarises the attributes of ‘Truly Global’ companies as the roadmap the company is trying to follow. ‘We are headed down this road,’ he said – ‘because we are a global company’.
The list itemises the attributes under a number of headings. In the area of Information Management, there is a recommendation for a centralised data warehouse that enables the company to track customer buying patterns and profitability across different parts of the world. A manufacturing company should also have consistent component and product codes in all its operations around the world.
‘We are in extremely good shape with that one,’ says Maxwell. ‘We put that central data warehouse in about four years ago. People who have access to it could tell you up to the last three hours what the quarter’s sales are, what the annual sales are and the costs are. You can look at it by country, by division or by product grouping.’
The main business application is an Oracle Financials ERP system that was implemented in January 1998. ‘It forced us to be consistent with things like that,’ says Maxwell. ‘Up to then we had separate databases. Now we have a single database located in our corporate headquarters in Rhode Island, but there’s a mirror of it here in Galway.
APC is also very consistent in terms of component and product codes globally, he adds. ‘We’re at the point where people take it for granted. The part numbers are the same around the world. That helps our inventory and manufacturing processes.’
For business processes, the guidelines say there should be a common ‘bid-to-cash’ process, standardised human resources and finance processes worldwide. ‘We are very good on this one,’ he says. ‘From the time there’s a bid placed for some contractor or project, right the way through until we provide the project or service, all the necessary financials are all done on the Oracle system.’
Room for improvement
He concedes that there is room for improvement on the financial side, largely to do with harmonising accounting applications across different countries. Because of the different tax and regulatory regimes in different countries, these systems have tended to be standalone ones that vary from place to place.
However, Maxwell says that about 95 per cent of the harmonisation work is done and that the outstanding countries will be rolled into the Oracle system this year. He concedes that the onset of new regulations in the US concerning corporate governance, such as the Sarbanes-Oxley Act, has accelerated the process. ‘Rationalising the accounting system was always on our long-term to-do list,’ he says, ‘but Sarbanes-Oxley has probably forced it on to the 2004 to-do list. It will also help us to speed up the month-end financial close.’
The recommendations for IT infrastructure are that a truly global company should have a single worldwide data centre, a global network, access for all employees to common e-mail, intranet and knowledge-sharing applications, and that PC purchasing should be consolidated to one or two suppliers globally.
Maxwell says that the company is heading towards having two or three enterprise data centres. With a two-site option, one centre would act as a mirror for the other. ‘There is some debate as to whether we should have a third data centre in Singapore to cover the Asian region,’ he said.
He points out that these recommendations were written before September 11th 2001 so that in fact the prevailing wisdom now is moving away from having a single worldwide data centre to having at least two for disaster recovery reasons.
APC is looking to transfer some of the applications from small data centres into its enterprise data centres. ‘Typically, in a small centre we would have a Lotus Notes server, a file server, a print server, and in some cases all three would be sitting on one box,’ he says. ‘We will be shutting down Lotus Notes in small offices in 2004 and we will also be looking at things like file servers to see whether we should consider storing more files centrally.’
The IT department in Galway comprises 25 people on site. Although some of them look after strictly local support functions, 17 of them are tied into the company’s corporate global IT effort. They include an Oracle applications team, an Oracle operations team, a Siebel team that looks after the company’s customer relationship management software, and a business-intelligence team.
‘Galway is not a copy of corporate headquarters just yet,’ says Maxwell, ‘but we’re beginning to get people here who are reporting into corporate headquarters. That’s the way the Americans want it. They want to move more of their IT people off shore.’
The Galway plant acts as a mirror site for the company’s main Oracle ERP system that is housed in the US. In Galway, it is replicated on a massive HP Superdome server, suitably backed up by an APC UPS of course.
‘The live Oracle system is in Rhode Island,’ says Maxwell, ‘and there is a copy running here. Rather than have that copy sitting here lying idle, waiting for a disaster to happen, we use it for reporting. Although the data is replicated simultaneously, the reporting incidence is refreshed three times a day so that people can access it as normal.’
Although the Oracle ERP system is currently the only one replicated in Galway, the company plans to do the same for its Siebel applications, its website and its Lotus Notes server, which runs many of the company’s collaborative applications (see panel) in the near future.
It is clear then that expertise in IT support for the company’s global business will be key to the future of APC and that the company’s Irish operation is working hard to be a vital element in that process. What extra features can IT deliver in the future? ‘The single biggest thing my users here are looking for is to build some EDI links to the company that does our warehousing,’ says Maxwell. ‘We want to take the manual drudgery out of communicating with them.’
Outside of manufacturing, APC’s sales force wants more wireless-enabled applications and the contact centre is clamouring for greater integration between its phone and Internet systems, all of which should keep the IT specialists at APC in Galway as busy as their colleagues on the shop floor.
16/02/04
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