Standard global templates key in Olam's IT rollouts
Singapore-headquartered agricultural products and food ingredients supplier, Olam International, says developing preconfigured global templates has helped speed up IT implementations needed to support its growing and diversified portfolio, with better cost and resource optimization.
Ashok Hegde, its managing director and global head of risk management and information systems, said the company embarked on a major plan since 2009 to extend its value chain ecosystem. For example, its coffee supply chain business expanded upstream with coffee plantations in Laos and Brazil, and midstream to convert beans into soluble coffee at sites in Vietnam and Spain.
These plans needed the support of a new IT roadmap, explained Hegde at recent media briefing to announce the company's long-term partnership with SAP, following a four-year engagement to roll out this then-new roadmap.
"[We needed] to set up an application portfolio that met those requirements, and have a robust and reliable common platform to be the foundation for our operations," he said. Being in the agri-commodities business, operational and cost effectiveness "from farm gate to factory gate" is critical, he added, spanning procurement, storage, processing, transportation, and distribution.
Hegde said the enterprise-wide agreement with SAP allowed Olam to deploy multiple SAP engines more extensively across the organization at a rapid pace and cost-effective manner.
The two first collaborated to develop an overarching global template that acts like a repository for all of Olam's key processes and segments of the supply chain, he said. Development of the template took around 10 to 12 months, and was ready for implementation by end-2010, he added.
Hegde said building a single platform based on this preconfigured template helped improve data visibility and flow, and operational efficiency. Any acquired businesses, from biscuits and almonds to sugar and spices, could also be quickly integrated into the platform as well.
Olam declined to state the cost of building the template.
In a separate interview, Roshan Kapoor, general manager of IT services division at Olam, said the deployment was cost-effective due to an "optimal combination" of internal knowledge of business and IT processes, as well as external resources from SAP's ERP (enterprise resource planning) and industry best practices. The main challenge of the template development was mapping all business processes across the organization's 16 platforms and 65 countries, he added.
Harvesting IT for business
The Olam executives could not provide details of savings gained from the implementation so far, but the company said it reduced the deployment time of IT rollouts by 40 percent to 50 percent on average.
Setting up IT systems for an acquired small business, for example, could take as quick as two to three months, Hegde said. Implementations are faster now because 80 percent of the template could fit across all operations, while customization was restricted to 20 percent, he explained.
According to the executive, the global template is first being rolled out in the top 10 countries where Olam has maximum investments in upstream and midstream value chain. The process has been completed in Australia, India and Vietnam, while implemenation for the remaining seven countries--United States, Argentina, Indonesia, Nigeria, Ivory Coast, Ghana and Gabon--is in progress, he revealed.