Fonterra's shift to HCL's IaaS is just the start of the journey

Fonterra's shift to HCL's IaaS is just the start of the journey

Fonterra is building a new ICT foundation before addressing its fractured and dated enterprise software legacy.

Credit: Supplied

New Zealand dairy giant Fonterra has gone live on HCL's infrastructure-as-a-service (IaaS), but that is just the beginning of the cooperative's technology renewal.

The project, which focuses on the replacement of outdated infrastructure and improving security, covers IaaS, end-to-end network services, service desk, cyber security and collaboration.

The first part went live on 20 July followed by another tranche in August after the shift from long-time partner Datacom was announced in February.

Chief technology officer Toby Granwal said in addition to the IaaS shift, which was helping get Fonterra off legacy "tin" and into the cloud, the cooperative had accelerated some of its other plans during the COVID-19 lockdowns.

Among other initiatives, a Microsoft Teams rollout was brought forward to replace legacy Skype and laptop platforms were renewed and standardised, as were mobile devices. 

The impact is obvious: Teams calls increased from around 200 a day in February to over 30,000 a day now, Granwal said.

A fleet of more than 60 types of mobile devices, support for which was a "whole cottage industry in itself", has been reduced to one type, enabling mobile app deployment, improved user experience and increased productivity.

Service desk was also a "high touch" area from a user perspective, now aiming to have 90 per cent of calls answered within 20 seconds.

The cooperative's enterprise application landscape, however, remained fractured and dated.

"We still run a fairly bespoke, customised set of legacy processes and therefore systems and integrations," Granwal said in a briefing last month. 

"We've still got SAP, still got JDE, a lot of custom applications, we've got multiple instances of SAP. A lot probably hasn't changed much."

It was important the cooperative address that, he said, but with HCL it had prioritised the foundational layer – infrastructure.

"That will earn us the right to talk about what to do from an ERP and application transformation perspective," Granwal said. 

"It's part of a journey. We've got to stabilise now and improve and build on the foundational infrastructure and then think about what we are going to do to untangle that mess because we are going to have to address that next."

Fonterra was still a heavy "on-prem" user of tin and part of the transformation under IaaS was working with HCL as effectively the company's cloud service provider to look at how it could move onto a more cloud based platform over time.

The IaaS shift also consolidated Fonterra's technology suppliers, bringing the coop's IT infrastructure services under one umbrella, said HCL executive vice president and country manager A/NZ Michael Horton. 

Another key focus was on enhancing the employee experience for Fonterra's global workforce and helping them to navigate through business operations and improve productivity.

Fonterra was a cornerstone client for the company's new Hamilton delivery centre, which now employs 60 of HCL's 200 local staff. Many of those came on board during the lockdown, Horton said.

While the value of the deal to HCL has not been revealed, one report put it at around $20 million a year, more than half of HCL New Zealand's reported revenue for the year to 31 March 2020.

The change was expected to save around $50 million over next five years, last month's briefing heard.

Horton said much of go-lives happened "from home" under lockdown in NZ, India or Australia as well as other countries where support was delivered from.

HCL's concept of the "human cloud", bringing people and workloads to the location that best services the customer, had worked "very, very well".

Granwal said a strategic review at Fonterra around a year ago prompted a rethink about its operating model and a decision to become more customer centric.

At around the same time, IT at Fonterra had a look at its services and ran an internal IT survey. 

"What it told us we were not really delivering what IT users were expecting," he said. 

"We weren't delivering the service capability that we need for the coop to deliver its new strategy. Something needed to change, that was pretty clear."

Granwal said Fonterra was a very complex and geographically diverse organisation with over 220 sites worldwide that needed to connect back to New Zealand.

The demands on ICT infrastructure were  diverse, from supporting a retail outlet through to protecting the business from cyber attacks across the world.

It had become important to partner with someone that could deliver a global footprint and consistency of service wherever Fonterra's employees were.

The IT team also had to service many competing demands, none of which were being delivered in the way they would like to.

Part of strategy, therefore, was to fix Fonterra's IT foundations, collapsing down to a smaller group of world-class technology players that could provide the kind of global service the company was looking for.

The IaaS shift aimed to achive three things: an enhanced experience of IT for users; sustained cost savings through collapsing contracts down to a smaller number, and; delivering a standardised, secure and reliable IT platform.

"Without basic stuff like that it's difficult to talk about a transformation journey," Granwal said.

The go-lives represented Fonterra's first successful step on a journey towards continuous improvement and transformation, he said. 

While it was still early days, the cooperative had taken an "absolutely critical first step" to try and achieve its objectives.

As for HCL and its Hamilton delivery centre, another opportunity is being explored: the creation of a centre for excellence for SAP services delivery.

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