ITW opts for simple IT systems over SAP, Oracle

NEW YORK (Reuters) - Illinois Tool Works Inc. (ITW.N: Quote, Profile, Research, Stock Buzz) has more than 700 operating units in 48 countries, but when it comes to its information technology the diversified manufacturer has an iron-clad rule: keep it simple.

ITW, which makes products including fasteners, food service equipment and counter-top materials, said on Tuesday it has acquired companies in the past and removed sophisticated information technology systems in exchange for a simple network alternative.

"We have several examples where we unplugged Oracle (ORCL.O: Quote, Profile, Research, Stock Buzz) and SAP (SAPG.DE: Quote, Profile, Research, Stock Buzz) and replaced them with a PC network that is far more resilient and user-friendly to the business needs than to the larger business systems," said ITW Chief Executive David Speer.

Large conglomerates often consolidate buying and implementation of business software, servers and data storage to save costs. As a result, they are often the most sought after customers for technology hardware and software players.

The company, with $13-billion in 2005 sales, has no overarching IT infrastructure that these businesses must adhere to. ITW does, however, work with the units to simplify the businesses and ensure the technology systems can handle growth.

"We don't have any centralized system or requirements. Each of the business units have to make their own decision about what the IT infrastructure is going to be," said Speer speaking at the Reuters Manufacturing and Transportation Summit in New York.

The decentralized IT structure is an advantage when it comes to meeting Sarbanes-Oxley requirements, said Speer.

"From a controls standpoint, it turns out to be an advantage because we don't have a heavy concentration of business all on one mainframe system," said Speer.