Kodak Alaris CIO has 2.5 years to replace all its legacy IT

Profile picture for user pwainewright By Phil Wainewright November 10, 2014
Summary:
Spun out of its bankrupt parent, Kodak Alaris has two-and-a-half years left to replace all its legacy IT before the old systems are switched off

kodak alaris graphic 980x460
Owed $2.8 billion dollars by the bankrupt Kodak film, camera and imaging business, the trustees of the company's former UK pension fund made a bold move last year to protect the future income of its pension holders. It handed over $650 million to acquire Kodak's legacy film and document imaging businesses — an organization with 4700 people in 30 countries and projected annual revenues of $1.3 billion.

Thus Kodak Alaris came into being in September 2013 as a separate global business, wholly owned by the UK pension fund. Its personal imaging division makes photographic paper and supplies retail image printing kiosks, while the document scanning business serves many of Europe's biggest banks and insurance companies in Europe.

The newborn enterprise now has to separate its operations from the continuing Eastman Kodak company, which has refocused its business on commercial imaging equipment after restructuring under Chapter 11 bankruptcy.

Building from scratch

The man charged with the task of building an entire IT infrastructure from scratch for Kodak Alaris is its CIO John Milazzo. As he put it when we met last week:

We're currently running our entire company inside Eastman Kodak. My challenge over the next two and a half years is transferring everything out.

What makes this unusual is that it's a completely greenfield opportunity from an IT perspective but within a long-established, global business.

It's a once-in-a-lifetime opportunity. For us it's the cadence we have to get right — can we get it done before our license expires with the Eastman Kodak Company?

Out-of-the-box processes

Moving to an entirely new ERP system is giving the company the opportunity to look again at business processes handed down from many years of prior existence. Rather than accepting those custom processes, Milazzo told me staff are being asked to use the out-of-the-box processes packaged into its chosen Dynamics AX system. If they want any customization, they have to justify the business case to a committee that signs off the necessary investment.

The nice thing about this is, we can look at the business processes coming out of Eastman Kodak.

Over the years we have customized processes in SAP. The challenge to our business team is, here is the standard business process out of the box, why can't we do it that way?

Any change [from the out-of-the-box process] needs to be documented, and we have an investment committee where you have to explain to us how we won't be able to do any of the business functionality unless it's changed.

If you set those hurdles high enough you find all these issues disappear and you're just left with the critical things.

Office 365 replaces Notes

The company has chosen to standardize on Microsoft applications, keying off its initial choice of Dynamics AX as its ERP platform.

Before we made any other decisions we decided what was going to be our ERP system. We then said, we want to try and utilize as much of the Microsoft stack as we possibly can.

The team is currently doing development and testing of the AX system in Azure, and if all goes well on that platform it will go live in the cloud in mid-2015. Meanwhile, the company has just rolled out Office 365 as its replacement for the existing Lotus Notes groupware.

Its rapid timetable didn't allow Kodak Alaris the luxury of a lengthy rollout. Milazzo said this meant a lot of communication, giving users early access to the new tools, setting up training classes for admins and offering remediation training after the go-live for users who discovered they were having problems.

In the end though, it was a matter of simply biting the bullet — or, as the company's chairman told Milazzo:

There isn't any other way to do this. Go rip the Band-Aid off the patient. Just do it.

My take

A fascinating microcosm of the challenges facing many enterprises as they migrate off legacy systems to new, more flexible alternatives.

Unlike most organizations in this predicament, Kodak Alaris has the added pressure of an immovable deadline when it will be obliged to cut ties with its former parent and all of the IT it previously used.

At first glance this seems to make the challenge even more daunting. But perhaps this is a blessing in disguise, forcing the organization to confront and resolve difficult choices, rather than postponing them to another day.

Disclosure: Microsoft arranged, but did not participate in, my meeting with Kodak Alaris CIO John Milazzo at its Convergence EMEA event in Barcelona. Microsoft paid my travel expenses to attend the event.

Image credit: © Kodak Alaris