Cleaning Up Technology

The Whirlpool Corporation has lofty ambitions: "A Whirlpool product in every home, everywhere." (See Figure 1) This global vision is supported by a three-tier strategy the company calls "Brand Focused Value Creation Strategy," in which it builds brand equity and customer loyalty; differentiates itself through marketing and trade promotions; and develops and manufactures products that consumers want to buy at a compelling price. This approach has become the driver for growth through innovation in both product and process.

Technology underlies and supports all of this, a role that evolved as the company has grown, turning into the conduit through which development can flow.

 "Our IT organization enables this global strategy by getting information and capabilities in place that help us to differentiate our products and services and by driving process efficiencies that free up resources that can be reinvested in product development and innovation," says Esat Sezer, corporate vice president and chief information officer, Whirlpool Corporation. By defining a business process and application vision, Whirlpool ensures proper decision making on a global scale, he notes.

 "At the foundation layer of our applications vision you can find standard business processes being executed across the board and on a global scale. Whirlpool has standardized worldwide operations for sales and distribution, manufacturing, finance and human resources on SAP R/3," explains Sezer. By the end of 2006, the company expects 35 countries, representing 98 percent of Whirlpool's revenue, to close their respective books and generate a P&L using this software.

 The implementation of these standard transactional systems operating on consolidated infrastructure now enable the standardization of business processes, consolidating financials, making business results visible, proactively managing margin/profitability and optimizing investment decisions. "The other benefit we will be getting is the sharing of best business practices. By leveraging standard systems and business processes, we can deploy differentiated capabilities invested in one geography to others, rapidly," he surmises.

INFORMATION SYSTEMS' MISSION

J. Michael Berendsen, vice president, global deployment, global information systems, Whirlpool Corporation, also talks about the changing role of technology at Whirlpool, which expanded in scope and criticality for both operational and strategic purposes. "The organization continues to evolve at a rapid pace as well. Our information systems team's mission is to accelerate Whirlpool Corporation's global success through the adoption of information technology," he notes.

Berendsen currently has dual responsibility in the organization; under one he leads the global deployment organization, comprised of four regional businesses, the corporate technology organization and the corporate center organization.

According to Berendsen this requires the global deployment organization to transform from a traditional role of just providing services and support to the company into a model that drives differentiating capabilities and business simplification through the adoption of information technology.

Traditionally, they would complete a business case to get the investment approved and then focus exclusively on execution. Whereas now they are reinforcing the value proposition throughout the initiative and being more disciplined in auditing results ongoing. He says, "Our strategy is defined. Our infrastructure, application and organization's visions are clear and now it comes down to engaging our process partners, planning the work together and then executing."

These actions require the global deployment team members to understand local, regional and global businesses, issues and strategies. They work with business partners to define what's required, understanding their tactical and strategic needs, articulate change and guide discussions with the global development organization to realize how emerging technologies and existing templates can be used to deliver business solutions, and coordinate and manage the delivery of solutions.

 "We are not in the business of just deploying technology -- we want to be the No. 1 maker and marketer of home appliances and grow into a recognized global leader from a consumer goods perspective -- we can enable and facilitate that for the organization, that's our job," he explains. He details the department's two focuses: One, as mentioned, is creating differentiating capabilities to help drive the company and win in the marketplace. Discovering how they can create the means to help facilitate new products, innovative services and solutions is the other endeavor here.

Looking Inside

In generating these resources, Berendsen and his team continually look at opportunities in the company's current operations and infrastructure for cost savings. A prime example of this is the company's recent implementation of SAP XI. He says that this was a natural next step as it ties to the company's strategy and supports its application and infrastructure visions. "Since we have a significant portion of our commercial business on SAP, this was an opportunity to put a new platform in place to drive trade and supplier integration as well as internal process integration," he says.

This platform also allowed them to move from higher cost service providers and eliminate other infrastructure and applications. "We were running other EAI tools we wanted to migrate away from to leverage more capability in SAP -- extending the platform itself provides not just mapping and conversion activity, but simple messaging so it could knock off other tools from our portfolio with this migration," he adds.

Hence, while the old technology was indeed functional, the issue became cost and how best to leverage the investments the company already had -- better and more significantly. Berendsen explains, "One of our objectives is to continue to provide not only the most efficient and effective operations for the organization but also to implement differentiating capabilities and this was an area that let us say 'okay' -- here's a new technology that will help us be more efficient in our current operations because in some cases we are paying externals costs for network or messaging charges; internally we are paying software maintenance and providing support for solutions that can do the same type of messaging and integration work, and here's where we can take a new technology or capability and remove some of those costs and expand into additional capabilities."

As a result of this implementation, Whirlpool was able to take out and replace their integration platform with trade partners and suppliers, while also leveraging the platform internally. "We can now use XI messaging to bring data back and forth as part of our Maytag integration; mapping and conversion activities are taking place through XI too," he says.

EXPANDED CAPABILITIES

Jim Shimp, vice president global application development adds, "Part of where the capabilities become more expanded for us is in the tools for XI and the way you deliver or setup your message streams. You are getting a lot more control and you get to put business logic into XI messaging system rather than write ABAP programs to send and receive some of that messaging whether the message originates from SAP or externally." Shimp's department is responsible for the understanding and exploration of Whirlpool Corporation's strategic technology -- mostly centered around SAP -- and for developing solutions that will allow them to be more effective as a business based on projects and requirements of the company.

More specifically, Shimp describes that XI increased their messaging capability and changed the skill set away from reliance on ABAP code. The XI platform has a lot more sophisticated logic capabilities surrounding message containers and can handle Internet technologies and open standards. He notes that the skill set of those utilizing the new technology did not really have to change. They required messaging skills, but not pure programming skills.

Shimp explains, "The people who had built old EAI legacy systems already had connectivity skills. So for them we just invested in understanding the XI basics. With this technology the breadth of what they can accomplish is greater and it has brought them into better understanding open standards." Shimp also mentions that with or without the implementation, Whirlpool could have accomplished the same things one way or another, but now it is more effective and is building off a strategic platform.

Berendsen expands on this, "Replacement of the legacy system was transparent to other legacy systems; this accomplished, it also opened up a different type of interconnectivity for business -- one example would be connectivity through the global data synchronization part of XI and how it goes to 1Sync for suppliers. It enhanced capabilities for us and opened up avenues."

Shimp says that with this standard platform and approach -- no point-to-point -- everyone can get data from 1Sync automatically published and passed on to their trade partners. They can keep their customers satisfied who are requesting the product data and do it seamlessly. Berendsen adds that being able to seamlessly integrate with those services that provide data synchronization capabilities to the trade is beneficial as well.

Berendsen comments that although the implementation wasn't "perfect," as they did have tuning activities to perform within the environment, all in all it has gone very well.

Shimp agrees, "The fact that we could decommission a legacy system that was very integral to bringing data from multiple systems from point-to-point and hub and spoke; to be able to do it and take it out piece by piece, and totally decommission even the infrastructure and the hardware, tells you if we weren't pretty seamless and successful, we would have never gotten this far."

The actual implementation took eight months, decommissioning piece by piece through phased approach with different groups. Beforehand, there was an additional nine to 12 weeks of discovery and preparation.

The ultimate proof of success is told when Shimp is asked if the implementation lived up to expectations. "Dollars we were spending on that entire legacy platform have been reallocated out of the budget they were in to other opportunities," he says.

Berendsen, Shimp and their departments will go on looking at technology innovatively to leverage that for their ongoing processes. It is not just the products and services of the Whirlpool Corporation that stand on innovation, but also within the entire information services organization.

Shimp says, "In support of driving an organizational vision, we talk about innovation and technology, we started to really get into SOA -- and how to create web and enterprise services to create different capabilities for our customers and trade partners. We are at the beginning stages of that, but when you take raw technology and change it to support an overall organization's vision and mission, that's the innovative use of technology."

There are several examples of how they have done that in different parts of the world, but Shimp acknowledges that there are still plenty of opportunities to bring the enterprise together; the product engineering and design organization could be better connected into manufacturing and branded marketing and sales. He affirms, "That's why SAP is such a strategic cornerstone for us because we understand and know the integrated package will allow us to do that -- all we have to do is to understand the technology and how to apply it to the different units to get the benefits of that integration."

Berendsen has the Maytag integration on his plate and explains that while some parts of Maytag use SAP, the majority do not. The plan is to bring them on to SAP and ultimately they will all be on same platform. Out of the four regional business units - three of them are converted, and he is working on largest in North America now.

Whirlpool says that bringing Maytag on board will increase the company's competitiveness in the global marketplace. Berendsen says, "The opportunity here is that with this acquisition, we extend our product offering and shore up some of our platforms significantly. Maytag brands have very loyal followings in the marketplace. There is a lot of equity in those brands. There are some great products that really enhance our overall offering."