At Barry Callebaut our IT strategy is based on our corporate strategy and is best described using three key words: harmonisation, centralisation and specialisation.  

Firstly, we are trying to harmonise our processes, software tools and business data across the globe. Our main customers are multinational food companies who manage their business on a global level. They expect that we do the same. Practically this means that our way of working needs to be harmonised internationally. For example, our global customers  expect our product specs and our processes to be the same whether in the US, the EU or in Asia. Since processes are supported by IT, we play a key role in this harmonisation.  

 

Secondly, we are centralising—or consolidating—our organisation as much as is possible. For example, we already deliver our entire corporate ERP (SAP) from a single data centre, and we already outsource that service to IBM Belgium. But we are also centralising at the level of the organisation: we are centralising competence centres in the US, in Africa, and in the EU. Outsourcing also plays a key role here.  Sixty percent of what we do at Barry Callebaut is outsourced; and we try to manage this on an international level. As much as possible we are trying to centralise our outsourced services with global suppliers.  For example, Accenture for ERP change projects; IBM for all hosting; EasyNet for our worldwide WAN cloud; and we’re trying to centralise our voice services although this is proving more difficult given the fragmented telecoms market.  Basically we are looking for regional or ideally worldwide partnerships, in the same way that our customers outsource their chocolate manufacturing to us at a global level.

 

Thirdly, we are specialising. For a number of our core processes there are no standard solutions. And since our competitive advantage is based on those core processes—they make or break our business—it is there that we want to be best of breed.  In those areas we tend to opt for tailored solutions and do a lot of the development work in-house, for example in the area of costing & pricing and in the area of commodity risk position management.

Firstly, SaaS is maturing. About a year ago I attended a major technology conference where SaaS was one of the topics of debate. The consensus among the major technology players seemed to be that SaaS was not mature and that it would probably blow over.  Indeed, at Barry Callebaut we had not made use of any SaaS products at that time.  But only a year later a lot has changed I think. Take our situation.  Over the past year we have been looking at CRM and since we run on SAP ERP it made sense that we evaluate SAP CRM.  But we also looked at Salesforce.com.  We put both products through a thorough evaluation on the basis of performance, risk and total cost of ownership. And the result is that we are going for Salesforce.com, our first experience with SaaS.  It just makes sense for us.  We do not want to re-invent the wheel on ‘B2B selling processes’.   And that is the appeal of Salesforce.com: it is an application that has integrated best practice in the sales process.  If we went for SAP we would still have more design and configuration work to do.  We also talked to a number of companies here in Belgium who have more experience with Salesforce.com and they confirm that story. With SaaS we should have a faster implementation time and our total cost of ownership will be lower on a tactical horizon of 5 years.  That is a shift.  In a matter of a year I have seen a clear change in the way companies are looking at SaaS.   Another example is expense note management.  Also there we have no need to reinvent the wheel.  It is a process that is available in the market as standardised, reusable component.  It’s more plug & go.  

 

Centralisation and virtualisation is another key trend. Today we still have a decentralised setup for file sharing: we have 500 servers spread over 50 sites worldwide. As I said, we are trying to centralise this server infrastructure to a single datacenter and we might outsource in the end if at lower total cost of ownership. Managing a server landscape is not our core competency. But it goes further. As we centralise our applications and computing power, so our PCs and laptops will become dumb terminals again. This has some tremendous advantages for us. We will have better control over standards and we will be more cost efficient since there is less hardware and software to maintain.  

 

Finally, the WAN cloud has made a huge difference to us.  Until 2008 we relied on point-to-point leased lines for our international network.  That was a too high cost, especially maintaining those lines.  Also, we had no instant backups for those lines.  Essentially it was a spider model with the head at our European HQ in Belgium; and if the HQ went down then the whole world went down. Today our sites simply plug into a WAN cloud, a service that we outsourced to an international network provider, EasyNet.

Essentially it is a shift toward what you could call the extended organisation.  Companies like us will become increasingly reliant on outsourced processes, on reusable components in the market.  You could compare it to the automotive industry where companies like Johnson Controls take responsibility for a whole range of manufacturing components.  Now we are seeing similar things happen in the food sector.  Companies are focusing on their core competencies and outsource all the rest.  I think this trend toward the extended or virtual organisation will continue.

 

Similarly, in our IT organisation we are relying more on virtual teams, who are focused on specific process domains. The distinction between IT and the business lines is increasingly ‘blurred.’  On the one hand, the system component in our IT organisation is becoming smaller. This trend started when the ERP providers began to work more with standardised building blocks or modules. That simplified things significantly, although we still had to do a fair amount of configuration work. But now with the emergence of SaaS, this trend is accelerating. The systems or technical side of the organisation we are consolidating, centralising and ultimately outsourcing if at a lower TCO.  At the other end, however, we are increasingly focused on the actual business processes; we work with the business lines to optimise and change their processes. This means that we are going to need other competencies: we will need to hire more business analysts, people with business experience and expertise. Ultimately I see our IT organisation—if we should still call it that—evolve into a specialist in business change and value creation.

 

This will also imply a paradigm shift in the consulting market. SaaS projects are easier and quicker to implement than the classic ERP projects. For example, last year many long-standing ERP consultant companies were still saying that SaaS would blow over. As a result, today they have very few competencies in SaaS; which is a problem for them, because we are looking for help with the implementation of Salesforce.com. Today it is the smaller players who still have the competencies and references in SaaS.  The larger players are waking up though and are beginning to invest in their SaaS capabilities. Within five to ten years I even expect ERP to go the way of SaaS.