SaaS as strategic enabler: four CEOs hold forth

There are many ways to view IT and each executive at the management table approaches it slightly differently.

Where a CFO might be focused on metrics such as cost and return on investment, a HR director on staff engagement and skills and a marketer on customer satisfaction and brand recognition, a CEO is primarily focused on strategy.

But what comes through most strongly speaking to the CEOs of Australasian cloud users is how easily they seem to have overcome their initial security concerns to shift directly to public cloud systems rather than private or hybrid cloud environments.

Business leaders featured in this article

Ricardo Fiusco, Redflex Traffic Systems, Melbourne

Joe Cucuzza, Amira International, Melbourne

Tony Melham, Coco Cubano, Sydney

Robert Nugan, Fresh Produce Group, Sydney

Melbourne-based high tech manufacturer Redflex Traffic Systems, which designs, develops and services speed and red light cameras for traffic control, has businesses on four continents.

Redflex found in SAP’s Business ByDesign a fully integrated cloud-based suite that CEO Ricardo Fiusco says will, over time, make his people more effective in their work.

At the most superficial level, the project, which went live only in January, has united the business through the cloud, enabling IT staff to focus on more important tasks than network administration.

But for Fiusco, a primary corporate driver is technology: Redflex, he says, is in a “tech arms race” with its competitors.

“We are building a smart business framework that digitally enables all aspects of the business,” he said.

“I have a software background and want to use technology to maximise everything we do.”

When the Australian Securities Exchange-listed company went to market for a new platform, it was initially looking for a project accounting package, but nothing seemed to fit the bill. Any solution also had to not only be comprehensive and fit for purpose today, but to future-proof the organisation as it grew and its needs changed.

Redlex engaged Artis Group for the Business ByDesign, implementation, and they deployed project management, manufacturing, HR, financials as well as delivering integrated process management and reporting. Importantly for a company with products full of advanced software and sensors, it also helps manage R&D.

For Fiusco, enabling his smart people to do smart things was paramount.

“The main thing is we wanted to give our team a comprehensive platform,” he said. “They are very smart people. Give them something powerful and they will use it – it will empower them.”

Redflex largely adopted ByDesign’s structures and processes, but once it is fully implemented the team can start optimising the software and champion it in their areas.

“There’s nothing holding them back,” Fiusco said.

Such changes and optimisations may also be aided by SAP recently enabling Business ByDesign with the company’s HANA in-memory database platform that accelerates analytics and delivers predictive capabilities and refined business processes.

While the project has gone well, the initial decision to shift to the cloud required a mental recalibration, even for a tech-savvy CEO like Fiusco.

“I never ever imagined putting our financial information in the cloud,” he said. “Now I think it’s the most obvious and compelling thing to do. I’m surprised at how good it actually can be.”

The first phase was rolled out in January at Redflex Enforcement Services in Sydney and took just eight weeks to get live. Business ByDesign will encompass the entire organisation over the next six months after which existing applications will be closed down.

Fiusco said it’s an exciting period and the software provides rich interfaces and a good user experience.

He added he was after systems that are intuitive and don’t require a lot of training.

“My people are brainy and I want them to focus on the pointy end of the business.”

Amira International mines the benefits of cloud

Amira International is a small but unusual organisation.  With only 20 staff spread across four continents, it manages A$55 million worth of collaborative research projects in geoscience, mine engineering, minerals processing and sustainability for its mining industry members.

As with Redflex, a shift to the cloud has united those dispersed locations and helped provide access to key information and the ability to share it.

Melbourne-based Amira has around 80 members ranging from large miners such as Rio Tinto and BHP Billiton to small junior explorers and equipment and technology suppliers to the industry, managing director Joe Cucuzza explained.

Amira shifted from ERP package Pronto in a client-server environment to Netsuite’s cloud platform in July 2012, but Cucuzza said that’s just part of the journey. After the success of the Netsuite shift, Amira is now looking at retiring its legacy customer relationship management system and shifting to a cloud based CRM service as well.

Cucuzza said the cloud facilitates access to systems and the sharing of information generally while Netsuite has delivered important management tools for Amira’s executives to better allocate resources to projects and manage stakeholders.

The old server environment running Pronto software was sometimes hard to access, posing all sorts of “intangible” problems.

“With Pronto none of our people who should have been using it were. It was just too complicated,” he said.

“Anything that detracts from access is always going to deter people. Now anyone can get into the system and do business.”

The decision to move to the cloud was in the end simple but Cucuzza, like Redflex’s Fiusco, needed some assurances about putting corporate data into a cloud environment.

“Confidentiality and security are important to us – we don’t want information to flow to people who shouldn’t have it,” Cucuzza said. “But we were convinced the cloud was not a step backwards. Once that was put to bed it was a natural move.”

For a small organisation, saving money was also an important, if more tactical, consideration.

The result is it is easier to run the business and information flows are more timely and richer. It is also easier for management to monitor the 25 research projects currently being funded around the world.

Access to real-time information has been improved and that is “most important”, Cucuzza said. Netsuite’s multi-currency capabilities were also welcomed.

With timesheets now also run through Netsuite, Amira has accurate information about the resources being employed in its research projects and can ask pertinent questions about whether they are being employed well.

“Having a cloud-based system facilitates that enormously,” Cucuzza said. “We can allocate effort on projects accurately. It was impossible before.”

That in turn makes it easier to report to the board and stakeholders.

It could also help with another project aiming to keep members better informed of their investment and financial liabilities. Amira is currently upgrading its website and wants part of that to be a member portal where they can get access to such real-time data.

SaaS a good fit for franchise businesses

Another business model that creates dispersed environments is the franchise.

Sydney-based café and bar Coco Cubano is aiming to grow from nine outlets now to up to 16 or 17 by the end of the year and also plans to target offshore markets. For self-styled El Presidente Tony Melhem, the cloud is a growth driver. 

After its first year of operation in 2008 using then PC-based MYOB software, Melhem decided to shift just about everything to the cloud.

First up was accounting, but Coco Cubano needed a system that would enable franchisee information to be accessed from head office in real time, something that offered layers of access permissions and something that allowed both the head office and the franchisee’s accountants or bookkeepers access.

The answer was Xero. As long as the information entered is correct, management can work more closely in real time with franchisees to ensure their success.

Melhem said such capabilities are revolutionising the way franchises can operate. Using Xero is specified in Coco Cubano’s license agreement.

Cloud-based accounting also frees management from their desks allowing access from anywhere to real-time transactional data.

In Coco Cubano’s case this is facilitated by integration with each store’s point of sales (POS) system. As ZDNet called, Melhem was about to have a meeting with Xero and the POS provider to enrich the information flowing from the POS into Xero to deliver more detailed product breakdowns.

Melhem said there is an up-front cost to shifting to the cloud, especially if you want to import historical data, but Xero has been really easy to integrate.

“It’s not a hard process,” he said.

Coco Cubano is “streamlining the whole business to Xero”, Melhem said, but that’s not its only cloud application. The company keeps its loyalty database there and its POS back-end there as well. Business documents are also available through cloud-based servers.

“Technology is important,” Melhem said. “What we are looking to do – what we will do – is put our learning and training material, video and ops manual in the cloud to support our expansion overseas.”

Fresh Produce Group enjoys fruits of its SaaS labours

Sydney-based Fresh Produce Group is an old hand at cloud, having shifted to Netsuite around five years ago. That move was driven partly by a need to accurately cost produce bought and sold in a business that traditionally works on thin margins.

Executive chairman Robert Nugan said around six years ago he hired a highly qualified technologist who looked at the business with a fresh set of eyes.  He had used Netsuite before and said it could fix an array of challenges FPG was facing.

And it has, but not without some investment and effort.

The SaaS software is highly customisable and over five years of use has been customised to fit FPG tightly. Nugan said that’s been worth the effort and expense.

“No system in the world can do what we’ve made this Netsuite system do,” he said.

FPG operates in six sites across Australia employing 200 people. It is a 24x7 business with complex processes and logistics.

“It allowed us to transact live, all touch points are live,” Nugan said. Previously data was updated on a DOS-based system or in spreadsheets whenever dockets were processed.

Being live and real-time allows accurate cost and margin calculations and all incidental costs can be attributed back to the right customer shipments.

Security wasn’t a challenge because Nugan didn’t think FPG’s corporate data would be of much use to anyone else.

However, getting staff to accept the system and use it properly was difficult and took over two years. Nugan said users only ever see their own view of the system and don’t realise that what they do, the data they enter, affects other users and the business.

Netsuite itself has also gotten better, he said. At first it was slow, but is now much faster.

Conclusion

Australasian CEOs are realising the strategic potential of cloud computing to drive business growth as well as reaping tactical cost savings along the way.

Importantly, the cloud is offering them new ways to allow staff to focus on doing smart business rather than worrying about IT. And this is not coming at the sacrifice of functionality – all of the CEOS ZDNet spoke to have invested in the customisation of standard cloud products to ensure they fit the business and deliver strategic advantage in competitive markets.