As Published In Special Edition for Windows

The New DNA of Development
By David A. Kelly

Unisys improves efficiency and effectiveness with Oracle and Microsoft.

Cutting costs is not a new goal to any organization. For IT organizations today, cutting costs is only one goal, and some of the most successful organizations are cutting costs and improving the efficiency and effectiveness of their organizations at the same time.

"Successful IT organizations are always trying to look for new ways to standardize and simplify. It helps wring the cost of the IT environment and make it more responsive and efficient," says John C. Carrow, vice president and CIO, Unisys Information Technology. "I think that the move to standardize and simplify has become part of the DNA of a good, results-focused IT strategy."

Since 1997 Unisys has moved strategically to reduce costs and increase operational efficiency by using a global set of applications, platforms, and business processes. By migrating to Oracle applications and databases running on Microsoft Windows platforms and ES7000 servers, Unisys has realized close to US$400 million in general and administrative (G&A) cost savings—lowering its total cost of ownership and meeting high levels of performance and user availability requirements.

This migration has reduced the number of deployed enterprise applications from 750 to 300. Among those deployed enterprise applications is a core set of Oracle E-Business Suite, Oracle's PeopleSoft, and Oracle's Siebel applications.

Snapshot Unisys www.unisys.com Location: Blue Bell, Pennsylvania Revenue: US$5.76 billion in FY 2005 Oracle products: Oracle Database, Oracle Application Server, Oracle E-Business Suite, Oracle Portal, Siebel CRM, PeopleSoft HRM Microsoft products: Microsoft Windows Server 2003, Datacenter Edition

"Oracle has been helping customers like Unisys get the performance, scalability, and reliability they need for their enterprise applications running on Windows. Oracle's commitment to Windows covers database, middleware, applications, and development tools and continues to be a very popular platform choice with our customers," says Willie Hardie, vice president of database product marketing at Oracle.

That combination has certainly been a good choice for Unisys. "There's been a fairly dramatic change in terms of the look and feel of IT, but the net result has been a tremendous savings in the G&A of the company," says Carrow. "We had the Hackett Group benchmark us over time, and our IT cost has dropped from [US]$13,000 to [US]$6,086 per user per year. That puts us in world-class territory."

From Hardware to Services

Unisys has been in the business of producing technology hardware—large, enterprise-class systems. But the company realized that the market was changing—and that it would have to change as well. So management decided to move from a hardware-centric business to an information services company, offering everything from consulting and outsourcing services to security services. Today, 83 percent of its revenue comes from services, with the remaining revenue coming from hardware sales, such as the Unisys ES7000 enterprise server. In the April 3, 2006, issue of Fortune, the International Association of Outsourcing Professionals ranked Unisys as one of the world's top 10 global outsourcing companies.

In changing its business model, Unisys knew it also needed to change its IT model. "We had decentralized IT out to the business units in the early 1990s, so we had an IT environment with a lot of disparity and a lot of nonstandard environments," says Carrow. "In addition to moving the strategy of the company to a services focus, we also centralized IT and started a long-term, continual effort toward standardization and simplification of both the infrastructure that supports the company and the applications that we run."

The result was a move to standardize on Microsoft Windows from the desktop to the data center, Unisys servers at the hardware level, and Oracle Database for enterprise database applications. In addition, under the Cornerstone program, Unisys replaced its outdated and customized business applications with Oracle E-Business Suite to create a consistent source of information and a dynamic view of operations. "The Cornerstone program really changed the look of our IT and ended up being a change agent for our corporate transition to a services-based company," says Carrow.

Scaling Up with Ease

With more than 36,000 employees serving customers in more than 100 countries, Unisys needed global solutions that could scale. However, when it originally decided to move its production Oracle databases onto the Windows platform, Unisys realized that the database scalability it needed was limited with IA32 technologies. Given this challenge, Unisys originally deployed the applications and Oracle Database on a UNIX environment and then migrated to Microsoft Windows Server 2003, Datacenter Edition running Oracle Enterprise Resource Planning (ERP) on the Unisys ES7000.

Working closely with Oracle and Microsoft, Unisys became one of the first companies to take a very large ERP database into production on an IA64 environment, in July of 2004.

"There are a lot of advantages to running Oracle on Windows, particularly for customers with investments in .NET development skills or who are committed to the Windows platform," says Hardie. "For example, many of our customers are developing and deploying .NET applications on their Windows platform and getting the benefit of Oracle's support for 64-bit architectures and database clustering."

Unisys has certainly seen those advantages. "Our experience of using a 64-bit version of Oracle Database running on a 64-bit ES7000 with Microsoft Windows has been very positive for Unisys," says Rao Bhamidipati, director of global systems services in IT, Unisys. "The performance has been outstanding. Tasks that used to take hours to complete now get finished in minutes. The stability has been outstanding. It's so solid that we barely have to be concerned about meeting our target of 99.9 percent availability."

For Unisys, the move to a 64-bit Windows platform enabled the IT managers to create very large single instances of Oracle Database—exactly what they wanted to scale and support the company's global user base. Unisys has 32 ES7000 systems in its data center—systems that can go from 8 to 32 CPUs, running either Intel 32-bit or 64-bit technologies. "Given the focus on centralized implementation, the scalability that we needed wasn't available with IA32 technologies," says Bhamidipati. "So as soon as IA64 technology was available, we moved the database to IA64."

While many enterprises deploy Oracle on UNIX or Linux, Oracle and Microsoft see great opportunities for Oracle on Windows. And customers like Unisys have taken notice. "We've really seen the relationship between Oracle and Microsoft change over time. Back in 2000 and 2001, Oracle seemed more interested in scaling out with Linux than in directly supporting our need to scale up with Microsoft on the Unisys platform," says Carrow. "But over the last few years with Oracle's Charles Phillips' and John Wookey's support, we've seen the Oracle-Microsoft relationship grow much stronger and the supportability of a mixed environment improve significantly. That's enhanced our capability to meet our 99.9 percent availability targets as well as our cost-of-ownership requirements."

With a centralized IT strategy like the Cornerstone program, ensuring availability is critical—especially since everything from its Siebel Customer Relationship Management (CRM) system to its PeopleSoft Enterprise Human Resources system to its employee and customer portals to Unisys.com runs on Windows 2003 ES7000 platforms, and most of the applications use Oracle databases. "Most of our applications run on Microsoft clusters, so we typically have an active-active cluster and, in some cases, an active-passive cluster. For example, in the ERP cluster we have the ERP systems and the data warehouse in one cluster, with one standby node," says Bhamidipati. "If any of these nodes have a problem, they fail over to the standby node. We also make sure that the standby node has enough capacity to handle two potential failed nodes."

Financial and Productivity Gains

Fundamental changes can be difficult for a company to enact, but they can also pay off in a big way.

According to Carrow, the estimated US$400 million Unisys saved in G&A cost reductions with the Cornerstone program weren't the only savings that accrued. By migrating to a standardized set of Oracle applications used around the world, Unisys realized significant savings in its procurement spending. Instead of negotiating locally or regionally for purchases, the procurement organization can implement global buying from fewer suppliers, thereby reducing costs.

The new systems also save time and make employees more productive. "Our finance organizations can get more-consolidated reporting with fewer reconciliation requirements, so we are able to close the books in two or three days as opposed to fifteen or more," says Carrow. "And although we don't measure this, we can see the sheer productivity of the workforce increase as they are able to use common processes around the globe."

Search and Integration

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One issue that's important for Unisys is the ability to search for information across the various applications, data sources, and repositories in the company. While a good internal and external search engine may make Unisys employees more effective, Carrow also believes that further consolidation of the Unisys application stack and unification of business processes across applications will have a big impact on its future success.

"We're looking forward to Oracle Fusion because it's the next logical step in our continued refinement of our applications," says Carrow. "We hope that we can go from 300 enterprise applications to far fewer than that, because of the integration that we expect to happen with Oracle Fusion. By documenting our use case models around how we do business today, we think we will position ourselves along with Oracle as providers of capability to help customers enhance their business value. And I think that Oracle Fusion will simplify the end-user equation—for example, [we can look forward to] the gradual migration to a service-oriented architecture that gives the user a single sign-on for multiple systems. And continued simplification of the end-user experience is what it's all about."

Interview with John C. Carrow: Managing Change Efficiently Unisys has made big changes in a short time. In 1997, it was known primarily as a technology company. Today, it is an IT services and solutions company with roughly 80 percent of its revenue coming from services. John C. Carrow, vice president and CIO, describes some of the challenges of making such a change. Oracle Magazine: With the size of the Unisys deployment, is it difficult to meet your availability target? Carrow: In moving to 99.9 percent availability, we've found that 9 times out of 10 the problems we have are not the hardware or software, but [human error such as] people making a change without coordinating with one another. What you need to succeed at our level is a good discipline around change management and configuration management. With that, you can mitigate a lot of the issues that you have in a less disciplined environment. Oracle Magazine: You've made some fundamental changes to the IT strategy through the Cornerstone ERP program—how have these changes affected your IT staff? Carrow: In 1997, everything we had was a homegrown application and nothing was off the shelf. Now, we're no longer in the coding business—we leave that to Oracle and Microsoft—and our IT employees' skill sets are more contemporary. Their skills today are clearly centered on integration and making efficient architectural frameworks, so they've really been upgraded to work the key issues of the organization and deliver business value, not just how to code. One of our goals was to have the IT workforce skilled at the strategic level and have strategic thinking in terms of the business value that they're bringing to the organization, and we've done that. Oracle Magazine: Where do you see IT strategy headed? Carrow: IT has gone through an evolution where we used to build everything ourselves. Now we've gone to a situation where we buy it, install it, deploy it, and integrate it. Maybe the next evolution is that we don't do any of that—instead, we buy it as a service. Since you don't have to install it or worry about operating it day to day, it will make us more agile and better equipped to handle enterprise changes.