Managing, Global, Organization, Offshoring

Building a global IT organization: An interview with DPWN's managing director for IT

Stephen McGuckin explains how the company consolidated its IT operations and developed a unique model for outsourcing and offshoring.

Few companies have as much on-the-ground familiarity with remote locations around the globe as Deutsche Post World Net, the corporate parent of Deutsche Post and DHL, a logistics and parcel delivery business. So perhaps it was natural that DPWN would emerge as a leader in the creation of a globally connected IT-development and operations model that has consolidated many of the company's once-fragmented application-development and data-processing locations into three supercenters, in Cyberjaya, Malaysia; Prague; and Scottsdale, Arizona, in the United States. Along with some outsourced help in India, these facilities keep DPWN's IT operations and development running around the clock. They are complemented by another application-development center, in Bonn, Germany.

Getting to such a high degree of consolidation wasn't easy—or fully planned. DPWN's managing director for IT services, Stephen McGuckin, who over the past decade has held a series of senior IT positions at DHL and its parent, didn't set out to create a 24-hour IT-development and operations program when he began consolidating the company's Asian IT centers, back in 1997. His goal then was to reduce costs and to improve the productivity of a host of IT-development locations for specific countries. After a thorough study of the possibilities, he chose Malaysia as the most central and economical. Working with the Indian IT-outsourcing company Infosys Technologies, he consolidated much of DHL's IT staff in Asia at the new location and outsourced many activities previously undertaken in house. The lessons learned from that first offshoring experience, and its demonstrable success in terms of both cost savings and improved productivity, were essential when the program was replicated in other continents.

To see the interview, go to the McKinsey website

About the Authors:

Michael Bloch is a principal in McKinsey's global IT practice. He is a leader of the outsourcing and offshoring practice and is based in Paris. Marcus Schaper, an associate principal, specializes in managing the performance of IT, particularly software and applications. He is based in Hamburg.