Wave of spin-offs puts Keane to the test

Carving up Cendant’s assets called for a complete overhaul, from hardware to personnel

Think you have a lot on your plate? Consider Bob Atwell, senior vice president of Keane, the $1 billion IT services provider.

Atwell headed the team that split the IT operations of Cendant, an $18 billion travel and hospitality giant whose subsidiaries included Coldwell Banker, Wyndham Hotels, Orbitz.com, and Avis Rent-a-Car, to name but a few. When Cendant decided to carve itself into four separate companies, it tapped Keane to transform its nearly $1 billion IT operation.

“Technology is a significant part of our culture,” says Linda Coughlin, Cendant’s chief administrative officer. “Of all the various activities involved in splitting up the company, IT was far and away the most challenging, where the stakes were highest.”

Keane began the process around Thanksgiving 2005. By the following Labor Day the split was complete.

Atwell began by setting up a program management office consisting of 15 to 20 Keane employees and an equivalent number from Cendant. Step one: Set up lines of communication, so that members of the PMO (Program Management Office) could report issues back to each of Cendant’s four new CIOs.

The second step was to break the project into groups of bite-size pieces that could be tackled sequentially. At one point the PMO had 19 parallel projects running for each of the four companies. They included everything from splitting the corporate LAN and voice mail systems at Cendant’s New Jersey offices into four parts to cloning all of Cendant’s 112 internal applications -- four times.

Cendant also had more than 800 telecommunications contracts and 500 IT service contracts and license agreements. Each of these had to be divvied up among the new companies, with new SLAs, pricing, and penalty structures where appropriate.

All the while, Cendant had to maintain normal operating conditions. “We had to keep the lights running while causing no harm,” Atwell says.

If all that weren’t enough, Keane’s project management office helped oversee the implementation of new ERP applications in all four new companies, a project that is ongoing.

“Cendant’s HR system was essentially at the end of its lifecycle, so it was a convenient time to switch horses,” Atwell says. “But at the same time, implementing new HR or financial systems always creates challenges. Our objective was to do it vanilla, get it installed, get it running, and then tweak it later. Tweaking as you go has led to the death of a lot of ERP projects.”

Atwell says three of the four companies have implemented Oracle Finance and one has finished implementing Oracle HR as well. The rest should be up and running on both apps by Q1 2007.

Cendant relied on integrators for the ERP project and has outsourced most of its datacenter and telecommunications functions. But another objective of the project was to find jobs for all of Cendant’s IT employees with the new companies, Atwell says.

So far, the company has managed to place more than 80 percent of the tech personnel from Cendant’s corporate staff, and has a transition plan for the rest.

The transformation project hit a few small bumps -- mostly involving glitches while doing a logical split of Cendant’s massive Denver datacenter -- but overall the process has been remarkably smooth, Atwell says.

From the outset, Coughlin says, Cendant set a goal to get the four new companies up and running 12 months after announcing their intention to split. With Keane’s help they did it in slightly more than nine months, with no business interruption. Total cost of transforming Cendant’s IT department: less than $10 million.

“As a company and a culture we’re generally consultant averse,” Coughlin says. “But [Keane’s] fact-focused approach and objectivity were invaluable. Without all that, it wouldn’t have worked.”

2006 INFOWORLD 100 WINNERS
Top 10 Finalists
Computing/Tech                                            Distribution/Supply Chain
Education                                                       Financial Services
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Insurance                                                        Manufacturing
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Sports                                                             Telecommunications
Transportation                                               Unspecified

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