In the late 17th century, a year after Isaac Newton published his “Principia,” a group of merchants and marine underwriters began gathering at Edward Lloyd’s London coffeehouse. In an early form of networking, they met to form business alliances and exchange news about the burgeoning shipping industry. In 1760 the Lloyd’s-based Register Society reported on the condition of sailing vessels for the benefit of those that insured and chartered them. By the early 1800s, the company, now called Lloyd’s Register of British and Foreign Shipping, had published its first “Rules” for the survey and classification of ships.

Today’s Lloyd’s Register is an organization of over 5,300 employees and 200 offices in 137 countries that provides risk assessment and mitigation solutions and management systems certification for industrial companies around the world.

Compared to other international companies, Lloyd’s Register is distinctive in that its foreign-based workforce of approximately 4,000 is spread out rather thinly across over 130 countries, some in very outlying areas. About half the company’s employees work in the field, visiting ships at harbor and at sea, oil refineries, chemical plants, construction sites and railroad yards. In such remote regions and rugged conditions the reliability of the company’s computer equipment is a major factor.

Early in 2002 Lloyd’s Register sought to refresh and standardize its disparate and aging inventory of laptop and desktop computers. In the absence of a centralized strategy, many of their widely dispersed foreign offices had made IT purchasing decisions independent of company headquarters in London. The result was a ballooning IT budget and a mélange of hardware and software that impeded the flow of information throughout the organization.

“It is very difficult to manage remote sites when people buy what they need locally,” said Paul Davies, program manager for Lloyd’s Register. “The head office in London would define certain specifications but in reality the people either couldn’t get what was recommended or they preferred to buy something that was different. Problems resulted from that.”

That Lloyd’s Register had no centralized purchasing strategy is not unusual for a top-tier company. A recent Purchasing Performance Benchmarking Study by CAPS Research revealed that only 10 percent of polled Fortune 100 companies reported having a centralized purchasing/contracting structure throughout their corporation, although 90 percent of management and purchasing agents agreed that standardization is important to the purchasing philosophy. Some respondents described such a structure as “very expensive to operate” and “a logistical nightmare.” Additionally, only 40 percent of the companies included in the study kept track of contract compliance.

The company’s main IT objective was to upgrade their minimum hardware standard to Pentium 4, 30 to 40 GB hard drives (depending on whether the machine was a laptop or desktop), 512 MB RAM and a CD/DVD drive. The software requirements were dictated by what the company calls its Gold Image and comprises the Microsoft XP Operating System, Microsoft Office with a complete set of language modules, and several proprietary applications. It would be a substantial improvement to the existing infrastructure. “I did a spot check to see exactly what we had around the world,” said Davies, “and we had everything from Windows 3.11 running on 486 boxes on up.”

Another challenge facing Davies and the Lloyd’s Register IT department was the need to standardize not just the equipment but its cost as well. The company knew from past experience that it was extremely difficult to buy hardware and software from local OEM resellers at a previously agreed upon price. Their concerns were not unfounded: According to a survey on international contracting published by the Strategic Account Management Association, a majority of buyers at 50 major corporations rated the performance of vendors as either poor or very poor and reported that they were unhappy with their inability to make and execute on global commitments.

By summer, Lloyd’s Register had decided to standardize on Hewlett Packard-Compaq computers. It was at this point that the HP sales representative recommended GlobalServe, a Valhalla, N.Y.-based company focused solely on managing and deploying digital (distributed) technologies worldwide. GlobalServe clients include American Express, Intel, Yahoo, and Bristol-Myers Squibb Company.

“Lloyd’s Register explained to us that the IT distributed rollout and refresh was an imperative action for their company,” said Scott Anderson, chief executive officer of GlobalServe. “They were trying to reduce their overall cost structure and this was the first major step in a series of projects to revamp their IT environment.”

Spiraling IT costs are a concern to companies in almost every business sector. A spending scoreboard compiled and maintained by the Association of Information Technology Professionals shows that the average annual IT cost per employee in the insurance industry is $13,564. The average for all industries is $6,918.

Having decided to replace 3,500 of the company’s desktops, laptops and notebooks and upgrade 2,000 existing machines, Lloyd’s Register, with assistance from GlobalServe, negotiated a global pricing plan with HP. “This was the first time we had put global pricing in place,” said Davies. “We never had global pricing before GlobalServe.”

“Organizations will negotiate a global price with an OEM and you would think that actually achieving that price in-country would be an easy task but the reality is that the negotiated global price is achieved in only 40 to 60 percent of transactions,” said Simon Phillips, the GlobalServe representative for the Lloyd’s Register account. “What GlobalServe does is bring that up to 100 percent because once a worldwide price is negotiated it is locked into our OneSource system.”

OneSource is a single unified interface that enables GlobalServe clients to manage every aspect of their entire IT infrastructure. Through OneSource and its direct connection to GlobalServe’s network of Global Service Providers (GSPs), Lloyd’s Register can order hardware and software, monitor and control its IT assets and request service on a worldwide basis. OneSource also provides specification overview, availability information, order status and in-country purchase price and spending in either the local or home currency. Both procurement and service requests can be integrated with the customer’s enterprise system and GlobalServe customers can view reports showing all spending and service activity in real-time.

“Because we don’t like to provide islands of automation we typically will integrate OneSource with our customer’s procurement system on the purchasing side and the service and support system on the backend side, “ said Anderson. “One of the key touch points is that this robust technology can be accessed in real-time from anywhere in the world.”

“The GlobalServe OneSource system enables us to place an order directly to the reseller,” said Davies. “And the global pricing compliance has been very close to 100 percent. I’m surprised that the industry average is so low because we haven’t had any problems.”

OneSource serves as a company’s catalog of all its GlobalServe-managed IT devices, providing ordering, maintenance, warranty and price information for everything from servers and routers to desktops, laptops, notebooks, printers, scanners and other peripherals. “There are even more things OneSource can do for Lloyd’s Register,” said Phillips. “For example, we are working with their financial people to deploy a depreciation management module that will enable their CFO to make better decisions about upgrading and disposing globally-distributed IT assets based on the availability of real-time information.”

Approximately 35 individuals within the company have been authorized by the company’s four regional IT managers to access OneSource and they can order only approved standardized items in the catalog. The system enables Lloyd’s Register to set spending limits and other parameters and automatically alerts managers when they are exceeded, giving the process a great deal of visibility and providing an effective means of control.

“Our 293 GSPs cover over 200 countries and territories and are accredited by most of the major manufacturers,” said GlobalServe CEO Anderson. “They offer GlobalServe customers a single point of contact within a multivendor environment. We select them based on four criteria: area of coverage; accreditation; pricing, and customer satisfaction. We monitor our GSPs on an overall and an individual customer basis and measure their performance against the specific service level agreements and pricing mechanisms that we have in place with our customers.

“By building an interface between their system and ours we are able to take cost out of the supply chain,” he said. “When we receive an order from one of our customers, it is automatically passed along to the appropriate GSP for fulfillment. This eliminates the need for order entry, sales and administrative costs.”

Davies noted that inventory control and service have been made easier because Lloyd’s Register now has quick access to the GSPs through OneSource. “Break-fix has gone down and the number of hardware failures has been significantly lower,” he said. “The support and maintenance is really worthy and the inventory feature will tell us how old our equipment is and when it comes out of warranty.”

Both parties agree that the implementation, which was begun in November 2002 and completed the following June, was carried out on schedule. The upgrades took 90 minutes to 2 hours for each machine and consisted of changing the hard disk, adding memory chips and fitting CD/DVD drives into the laptops. “We’ve had no problems with that at all,” said Davies. “When you look at how many countries we’re in and the fact that we needed to not just take the box from HP and give it to the user but load the image on and commission it on the desk, I was surprised it was 99 percent on the schedule date. The remainder was held up in certain countries because of difficulties due to the HP-Compaq merger.”

“One of the most challenging aspects of the Lloyd’s Register rollout,” said Phillips, “was that many of their employees are stationed in very remote areas and our service technicians had to coordinate with each of them to provide the right computer, the right software, the specific image based on their particular skill set and it all had to happen with a minimum disruption to their day-to-day business.”

“GlobalServe stepped up to the plate very well,” said Davies. “In my personal view the people they have in place are very efficient. We asked their resellers to load the images onto the hardware and that made for some very challenging work that GlobalServe executed very well.

“On average our customers get complete payback on their investment within two to four months from the time we begin working together,” said Anderson. “When you look at ROI, that model says that it should be 5 to 10 times their investment over a three year period. But that’s just a mathematical equation. What we tell our prospective customers is that if they don’t see getting their return on investment within eight months, they shouldn’t do business with us.”