Corporate IT strategies: Did Dow's win out over DuPont's in merger plans?

Tom Paine

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The Inquirer's Joe DiStefano nailed it.

In early November, he picked up a good deal of talk and confirned with the company that DuPont had suddenly put on hold its 'One DuPont' IT upgrade, a major SAP overhaul. The decision came just three weeks after Tyco chairman Edward D. Breen was named interim CEO of DuPont, replacing Ellen Kullman, who resigned under obvious pressure.

DiStefano correctly surmised that the holdup could be related to prospects for a possible DuPont merger with Dow Chemical. But even he may not have realized how fast things were moving.

Dow CEO Andrew Liveris called Breen on his first day in the offIce at DuPont in early October, and Breen was receptive to further discussions, as was widely reported. So it would seem plausible that the holdup of the IT project was related to the developing merger strategy.

But the differences in IT strategies between Dow and DuPont could be more fundamental. DuPont ex-CEO Kullman, in her July earnings call, was quoted by DiStefano as saying: ""Over the last three years we have undertaken a program that we call One DuPont, and it basically changes the fundamental transactional backbone of the company into a simplified, standardized to SAP standards, not to DuPont standards, and moving to standard costs, common chartered accounts, the whole thing, across our globe."

But Dow's CIO Paula Tolliver, in a Wall Street Journal blog post just days before the merger was announced, had a much different vision. Having spent eight years and $1 billion on a wall-to-wall SAP ERP implementation compLeted in 2014, Tolliver had some doubts about the results.

Would Dow undertake another such huge implementation? "Not in today's world," she said, implying that Dow would be looking at more flexible Cloud and SaaS solutions in the future.

So it sounds as if there were two visions of the future, and Dow's apparently won out. Though it's worth noting that to this point, the two companies' environments are virtually the same. If the deal goes through, it will be interesting to see what changes are implemented, both at the corporate level and at the three proposed business units.