Emerson is known around the world for making products and systems for companies ranging from telecom to appliances and industrial automation to tools.

Most notable is the 115-year-old company’s evolution from a fan and electric motor manufacturer into an engineer of advanced products such as industrial control systems that sense their surrounding and energy efficient air conditioning system.

However, what makes Emerson newsworthy is the extensive use of information technology to globalize its products, operations, and manufacturing. To be more precise, Emerson is revamping its Enterprise Resource Planning system and Material Information System and replacing it with Oracle software.

Emerson operates over 60 divisions around the world that generates $5 billion in purchases, has one million part numbers and 400,000 suppliers. The glitch here was the vast ERP in place, over 100 across 45 vendors, which not only created confusion but also affected productivity.

“Two years ago the company went ahead with a massive company wide rollout of Oracle software and we quit counting,” says Charles A. Peters, Senior Executive Vice President and the Chief Information Officer, Emerson.

The rollout has cost the company nearly $40 million so far, and is still 20 percent complete. By investing in technology, Emerson not just increased the sale of instruments, software, and services but has also kept the competition at bay.

As the CIO of a global company, Peters has also developed a new technology that allow Emerson’s customers to build lean-manufacturing practices to increase productivity and profits. “Few firms have a management structure like Emerson that acts fast,” says Peters who also serves on Emerson’s Board of Directors.

‘It certainly allows all board members access to knowledge of what they are doing and the impact it has on the company and certainly it allows me deeper inside into issues like Sarbanes Oxley and other compliance issues,” says Peters. “Mainly in this era, information technology enables new business models, which is the ultimate strategy opportunity. Most decisions are made by the operations with a great interest and being a part of that operation is really critical in this era,” Peters says, about his role in the board.

The CIO’s role in the management emerges from the need to transform and generate maximum benefit from technology. “The best thing about technology is that it led the transformation in the early 90s. It was a big enabler for the manufacturing industry. Manufacturing companies realized in the 90s that properly deployed IT can be of big benefit for huge gains and productivity. IT deployed in the last decade for productivity is evident even to this day. With the Internet, we saw opportunity to create entirely new business models and so IT became a very powerful constituency in all companies and as a result it caused significant improvement in responsibility and visibility for the CIO,” Peters says. “CIO’s need to put their weight behind and should be entirely responsible for productivity gains, changes in business and applications.”

As business changed, the New York Stock Exchange listed company generating $14 billion in revenues is expanding its operation. For a better understanding of the kind of products its customers around the globe want to buy, keep operating margins high, manufacturing lean and to combat higher materials costs for steel, aluminum, and copper the company began outsourcing to China and India.

“In today’s world we have become aware of whole hardware architecture and we decided we could outsource them. The CIO can get to work with those outsourcers as opposed to actually making decisions. We are very much concerned with channeling more of our applications with a more practical point of view, working on a different ERP model. We are building two ERP models for Emerson, one for large division and a much more simple platform for our smaller operation” Peters observes.

In India, Emerson concentrates on two major ERP work; engineering support and software implementation support which includes implementing projects, Oracle applications and writing business applications besides customized business.

Its offshore development center in Pune does basic engineering design for 29 divisions. Since its inception in 2000, Emerson India team has grown to 700 from 100, and will add more.

Picking up three advantages Peters makes his business case, “Starting a center in India was to get the domain knowledge of the engineers in India, besides it was cost and retention driven decision.” The India center has stood up to his expectations. “We got the cost advantage, we were able to retain our people and transplant our domain knowledge,” he says.

In line, with Emerson’s approach to become a global company with the help of technology, India operations have worked positively. “One of the advantages we have is a great history in this country. We have a large number of operations. We have 14 entities and sales of $250 million and hence, the comfort of operating in India. Therefore it was easier for us to set up our center in India than other corporations who have same level of experience,” comments Peters.

As the CIO of global development, Peters is combining technologies across the Emerson group and says the best part is running a center on own rather than hiring a third party. “We are not in the business of selling our services. Even considering the startup and building of the infrastructure was lower for us. The cost differential versus the investment is not a challenge. In a captive center, we can learn very high price stabilization which a third party provider cannot provide and that impacts the economics pretty much,” he sums up.

A lean thinking, indeed.