How it can help avoid the conglomerate syndrome: lessons from luxury

English-speaking IT professionals often bemoan the rise of “spaghetti IT.” Their French counterparts prefer the mille-feuille pastry as an analogy.

Whatever the metaphor, the picture is the same: at large companies, IT is a stack of overlapping systems, complex to integrate and hard to simplify. According to a recent Hexagon report, 70% of executives say their company has increased the number of tools and data sources used in the past year, with manufacturing the most affected (76%).

Much of this complexity stems from the way European companies have grown. Mergers and acquisitions quadrupled between 2004 and 2024.

IT teams are increasingly burdened by silos and lack of interoperability

While everyone agrees that IT plays a crucial role in driving value from these acquisitions, this is not reflected in practice: IT is seldom part of the selection or due diligence processes, leaving teams to align software and processes after the fact.

The consequence of these trends is that the IT landscape starts looking a lot like the industrial conglomerates of the 1960s – bloated, siloed, with strong differences between entities and activities and little ability to drive economies of scale or innovate.

In a recent survey, IT teams reported spending 40% of their time trying to build integration applications. More than half of executives say their teams also spend an excessive amount of time manually consolidating data.

The rise of luxury and IT conglomerates

The luxury sector illustrates the point.

In the past decade, many luxury stores globalized at speed. They built vast international store networks, sometimes adding more than a hundred stores in the space of a few years. They also scaled up e-commerce and acquired distributors and suppliers: Rolex bought its long-time partner Bucherer, every large player acquired some of their suppliers and brands like LVMH or Christian Dior expanded into many new sectors, from beauty to lifestyle to hotels to fine dining.

In this situation, it is easy to be tempted to function as a conglomerate, with each entity keeping their own technology stack and processes – particularly in a sector like luxury, where stores have long thrived on the principle that “small is beautiful,” with autonomy prized as a way to preserve identity and creativity. But two trends make this temptation unsustainable.

The first is the expanding compliance burden. IT is now responsible for enterprise-wide oversight, yet regulations such as Europe’s NIS2 Directive on cybersecurity and the forthcoming Digital Product Passport (DPP) demand reliable, connected data across the organisation. A scattered IT estate makes this requirement almost impossible to meet.

The second is technological acceleration. When resources are consumed by maintaining fragmented systems, there is little capacity left to adopt new tools. Companies with cleaner IT foundations can innovate faster, leaving less integrated rivals behind.

Lesson 1: Building consistency where it matters

So how can organizations drive meaningful consistency without stifling originality or innovation? One iconic European brand illustrates the way forward.

After years of rapid expansion, it adopted Enterprise Asset Management software to bring consistency across production, logistics and retail. The goal was not to standardize design or craftsmanship, but to align how assets were maintained, compliance monitored and data captured. The result was improved reliability everywhere, from boutique lighting to production equipment.

Reliability may not be the most visible dimension of luxury, but it is essential. As technology becomes more central to both the store and online experience, IT’s role is to provide the unseen foundations that allow excellence to be delivered consistently, phase out manual processes and local disparities.

Lesson 2: Establishing a three-pillar strategy

How do companies that thrive deliver on that agenda? First and foremost, by establishing a digital backbone of core systems – asset management, quality control, compliance tracking – that serve as a foundation across the enterprise. This includes making it a requirement for any newly-acquired entity.

Other industries have shown what this looks like in practice.

In construction, Eiffage has made Enterprise Asset Management a central pillar alongside ERP, using it to manage large infrastructure assets with better interoperability and a stronger springboard for AI. In pharmaceuticals, Pfizer adopted a similar approach. As Mike Tommasco, former Vice President at Pfizer Digital, put it: “Our strategy as a company is part of the growth of Pfizer. Pfizer would buy companies and a lot of our job was to consider how we can help them become more efficient. One of our strategies was to put in core solution capabilities, such as maintenance management and calibration. This capability set was one of the first global models.”

Lesson 3: Striking the right balance between consistency and flexibility

ERP will always be the first pillar. But both Eiffage and Pfizer have shown why Enterprise Asset Management deserves to be the second. It brings better interoperability, limits dependence on a single vendor ecosystem and complements ERP in ways that make operations more resilient.

The third pillar depends on the sector. In labour-intensive industries, HR systems often come next. In luxury, closer integration between EAM and Quality Management Systems makes more sense. It allows stores to monitor quality along the value chain rather than only at the end and positions them to meet the demanding requirements of the Digital Product Passport.

The right foundation strikes a balance: enough consistency to secure visibility and compliance across the organisation, but enough flexibility to adapt locally. That flexibility has to be embedded in the tools themselves, through features like a Python framework that allows different uses of AI, or a broad set of connectors that ease integration with third-party solutions.

The point is not to stifle innovation, but to channel it. When entities innovate on top of a common foundation, projects can scale and replicate. When they work around it with disconnected pilots and point solutions, they cannot.

For IT teams, this discipline is not a luxury. It is a way to avoid the proliferation of headaches that already consume too much of their time.

---