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The Subsidiary Sandwich

The Subsidiary Sandwich

CIOs in subsidiary offices of global corporations often report to both the local CEO and the international CIO. Serving two masters can be liberating or a liability. A look at the chance and challenge of running a subsidiary’s IT

For most CIOs the buck stops with them when it comes to delivering appropriate, robust information services for the business. But for the CIOs of subsidiaries of multinationals, many IT decisions and deals are nutted out overseas by global CIOs. Subsidiary CIOs are left to execute and operate. It can be liberating to have someone else select technology and negotiate international procurement arrangements, freeing up a subsidiary CIO to concentrate on developing information systems to support the local business. However, it can be a liability too if the global CIO fails to grasp that what might make good sense in Seattle does not hold water in Sydney, where support and skills might be different.

Even where most of the key decisions are taken overseas, there is no abdicating the responsibility of running a subsidiary IT group. The buck still rests with the local CIO even if it is a decision taken thousands of miles away that is at fault. As one subsidiary CIO pointed out, "General managers still want warm blood they can throttle", if something goes amiss.

Although Australia remained fairly small in the Unilever empire, the IT function was fairly well advanced and in some areas Bartlett was able to take a lead regional role

Currently the GM of IT at executive recruiter Hudson, Sue Bartlett sat in the CIO chair for three years at Unilever Australia. Bartlett spent many years in different Unilever subsidiaries and on reflection believes that there were both advantages and disadvantages in being a subsidiary CIO.

The challenge was to maximize one and manage the other.

After joining the company as an information analyst in London, she travelled around the world working in Unilever IT departments in Europe, Japan, Indonesia and Australia. Appointed Australia's CIO in 2002, Bartlett says that she reported to the CFO of Unilever Australia with some dotted line responsibility to the regional CIO who was based in Singapore. Within the region, although Australia remained fairly small in the Unilever empire, the IT function was fairly well advanced and in some areas Bartlett was able to take a lead regional role. For example, with the regional implementation of Siebel, "we took the lead position and then rolled it out to less developed countries", says Bartlett.

Although she feels that when she was Unilever CIO she ran her "own show", Bartlett acknowledges there were peculiarities about being a cog in a much larger international machine. Some were advantageous: for example, there were regional synergies, with the infrastructure management centre being run out of Singapore, which ran Unilever Australia's ERP system. "I was able to have access to a higher spec machine than I could afford and a better level of disaster recovery than I could have done. The infrastructure is a lot easier than having to worry about it all yourself. And while I paid a fee to the region it was less than if I had my own data centre."

Also on the positive side, Bartlett had access to the "global buying power of a company like Unilever, which was different from the buying power of Unilever in South-East Asia, which was only equivalent to a medium enterprise. So I could get much more attractive rates from companies like Accenture." Having a big parent, she believes, let her punch above her weight. "I was talking to IBM at one time and I was able to access their thought leadership in the US because I was part of Unilever globally. IBM in Australia did not directly benefit but it was part of developing the global relationship between IBM and Unilever.

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