HIGH TECH | ON DEMAND
OUTSOURCING FUNCTION,
NOT FORM
ORACLE ON DEMAND PROVIDES AGILENT WITH THE FLEXIBILITY IT NEEDS TO THRIVE.
BY ANN C. LOGUE
usiness is variable. Every day brings new challenges,
new opportunities, and new ideas. Despite the varying
needs of business and the changing nature of informa-
tion, most organizations view information technology
as a fixed cost. That can create bottom-line leverage as the busi-
ness grows, but what if your business introduces groundbreak-
ing technology that causes huge spikes in demand? What if it
makes acquisitions to bring the best technology on the market
under its roof? What if it sells off product lines and spins off
entire divisions in order to let everyone focus on what they do
best? In a variable business, fixed-cost technology can weigh the
company down.
2002, it converted from legacy
information systems to Oracle
Few businesses have entered
the twenty-first century with
more variability than Agilent.
The Santa Clara, California–
based company makes measurement devices used in
communications, electronics, life
sciences, and chemical analysis.
The types of devices that its customers need change with every
advance in measurement and
scientific technologies. Some
of its products measure things
that weren’t even discovered
when the company completed
its 1999 IPO that spun it out of
Hewlett-Packard. Agilent now
has 19,000 employees generating US$5 billion in revenue from
locations all over the world. In
TIM WEBB
On Demand to get the flexibility it needed to thrive as a changing company in a changing industry.
Since Agilent’s IPO, the company has not only introduced
new oscilloscopes, microarrays, and multimeters but has also
made four significant acquisitions and two business unit sales,
and bought and sold different technologies and product lines
as it honed its precision edge. In 2006, Agilent spun out Verigy,
which makes semiconductor testing equipment.
“The company has been going through ups and downs in
terms of mergers and divestitures,” says Suresh Vaidyanathan,
Agilent’s director of IT and enterprise business solutions.
Moving from a traditional fixed-cost center to a flexible sourced
model, Agilent’s IT group made a significant contribution to
achieving a return on equity
of 17. 9 percent in 2006. “We
found partnering with Oracle
On Demand to be a great
strategy to move the lever on
costs, up or down, depending
on which way we go with our
business,” Vaidyanathan says.
Having lived through the con-
version from Hewlett-Packard’s
legacy systems, Agilent’s man-
agement realized how important
the IT transition is to acquisi-
tion success. The company
needs an IT infrastructure that
can handle all the transactions,
and it found it had the most
control through outsourcing
management of its software with
Oracle On Demand. “Agilent IT
now has a multisource approach
for its IT sourcing strategy. We
do have key functions in IT
