Pabst CIO Ben Haines brewing cloud-first IT

Pabst CIO Ben Haines brewing cloud-first IT

Summary: Pabst Brewing Co. is battling giants in the beer market and its secret weapon may be more nimble IT. That reality means legacy systems are being swapped for cloud services at a rapid clip.

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Pabst Brewing Co. has been around since 1844 in some form and now is a marketing juggernaut with brands such as Pabst Blue Ribbon, Schlitz, Old Milwaukee and Stroh's. Today, Pabst contracts out its brewing so it can focus on the marketing and 600 distributors and is tossing out its legacy information technology infrastructure as fast as it can.

In other words, Pabst's virtual brewing approach has propelled it to be the largest independent brewer. How? Pabst marketed its PBR brand heavily and become a college and hipster staple between 2005 and 2010. In May 2010, Pabst was taken private by investor C. Dean Metropolous and the mandate was clear: Ditch the company's non-profit roots and move quickly to grow.

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Enter CIO Ben Haines in Nov. 2011. His mission was "to bring us into a new age," said Haines. Indeed, Pabst's size: Roughly $1 billion in revenue and nearly 3 percent market share is its strength and weakness. Pabst can't match the spending from Miller Coors (Miller, Coors, Blue Moon, Pilsner Urquell) or AB InBev (Budweiser, Stella Artois, Leffe and soon to be Corona), but can be more nimble.

To be more nimble than the giants all Haines has to do is come up with more lightweight IT. "We can move quickly," said Haines, who was director of architecture and emerging technology at Red Bull North America before joining Pabst. "At a high-level we want agility and speed."

But first Haines had to clean out its legacy infrastructure in a process that's still ongoing. More often than not, being nimble requires a cloud first approach---an unlikely strategy given the size of its acquisition-happy rivals. "What I've been doing is ripping out legacy and replacing them with software as a service," said Haines.

His first move was ditching Microsoft Outlook and Exchange for Google Apps. Okta, which manages identity as a service, Zendesk (helpdesk), Concur (expense management, Box (doc sharing) and Tidemark (analytics) were ushered in to put IT in front of business. BlackBerries were tossed---along with the servers that went with them---for Apple iPhones and cloud mobile device management tools. Haines' method is to replace commodity infrastructure with cloud services. Over the weekend, Pabst cut over from its San Antonio data center to Rackspace's private and public cloud for a "mixture of managed services and cloud," said Haines.

"We went for the low-hanging fruit and are now looking at ERP and business intelligence," said Haines.

Simply put, the degree of difficulty is about to increase for Haines.

Ben Haines, CIO of Pabst Brewing Co.
Ben Haines, CIO of Pabst Brewing Co.

Haines strategy is to move business intelligence and analytics to the cloud before Pabst's CRM and ERP systems. Why? it's easier and arguably more important. "It just takes more to move an ERP system and a lot more discussion and work across groups," said Haines. "Financial reporting touches every user potentially. We can slot in a solution for ERP afterward."

According to Haines, installing traditional business intelligence system took servers, a central data warehouse and a year of planning. Tidemark absorbed multiple data sources and put it in an easy to use interface. Pabst's biggest challenge is that it takes in data in multiple forms from 600 distributors who move the brewer's 35 brands. Tidemark also allowed for data to be entered and consolidated via its application---something that usually required another system.On analytics, Haines decided to partner with Tidemark, a start-up that just launched generally available apps on Tuesday. "We just didn't see anyone else doing this," said Haines. "We set up Cognos and Business Objects at my previous companies and set up an awesome system, but it took us three years. We don't have the time or money to do that."

"With financial reporting the biggest challenge is the silos," explained Haines. "Now we can put finance, sales, volumes and some idea about margins on one platform. We need to make sure that we just aren't selling lots of beer and not making money."

Pabst's first use of the Tidemark tool took 45 days and the complete build will be finished in about six months.

What's left? Haines said Pabst is in talks for a cloud salesforce automation tool. Today, Pabst has a custom .Net CRM system with custom SQL that feeds into Microsoft Dynamics ERP. Haines wouldn't name CRM vendors he was scouting, but when asked whether he'd go with SAP or Oracle he said he'd refrain. "Traditional vendors are trying to get into this space (cloud), but it's because they have to. It's not in their DNA and they have to protect revenue streams," said Haines. "If you go to Google Apps and Salesforce they know how to talk to each other. Microsoft to Salesforce is just not a native conversation. Pure cloud vendors just think that way."

Haines acknowledged that CRM and ERP swaps for Pabst are trickier. The latter swap will require a lot more thought. Why? Pabst is a tweener company. The marketing side of the company could easily fit the customer profile of a Workday customer---it's HR and finance. However, Pabst also has to deal with supplies and distribution virtually. Those distribution qualities would point to a traditional ERP vendor. Pabst has been using Microsoft Dynamics, formerly Great Plains, for about a decade. The problem for Haines is that Pabst could continue to use Dynamics but it's "just not cloud ready."

Pabst most likely will either go on-premise for ERP or use some hybrid approach. "The challenge for me is that we're stuck in the middle. We don't brew beer, but we sell to 600 distributors. We're a broker. I had the same situation with Red Bull. We tried a cloud ERP project and it was a massive failure. We tried cloud ERP on NetSuite, but didn't fit a traditional accounting model. We customized and created a monster---except it was in the cloud," said Haines.

One ERP option for Pabst maybe a traditional system with managed services. "Cloud solutions don't fit and Microsoft isn't ready for any cloud from a process standpoint," said Haines, who noted he liked Workday, Financialforce.com and NetSuite, but the Pabst model doesn't fit.

For now, Haines said he will spend more time to work through ERP options and "understand how vendors can help us in this model." "In our world, there are 600 distributors and data sources. We need inventory and shipments pieced together, but we don't control the information," said Haines. "Our No. 1 goal is to manage out of stocks and that's challenging when you don't control the data." Given the ERP pickle, it's no wonder that Haines went the cloud analytics route first.

Topics: Cloud, CXO, Enterprise Software

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10 comments
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  • So no mention

    of any ROI, that I can see, for this massive move to the cloud? Sure you are upgrading systems but does it cost less or more?

    I wonder how their users like Google Apps (I am guessing just Gmail since you specifically pointed out Exchange) over Exchange/Outlook?

    Their market share is 3% because their products suck. Sometimes I think these new guys come in and make all kinds of changes, not because something is broken but more to make a name for themselves. They get a big bonus and then leave 3 years later. Next guy will come in and move it all back from the cloud, stating how much money they will save.....and get his bonus.
    JeveSobs
    • Agreed

      IT spend is not needed to tell them why they only have 3% of the market (is that US?). A taste test focus group will cover that. Perhaps some marketing spend is also in order. I don't recall the last time I saw a commercial for any of these products. Zack Brown mentioning a PBR in the "Toes" song is the only mention I have heard n years.
      zdnetreader123
    • Obviously

      The article doesn't mention all that you are wanting to hear, that's for sure. With that being said, it also doesn't mention what was there from the beginning, how old was that technology, and it also doesn't mention how much money there were wasting on old equipment and processes. Do you honestly think they would go this route if there wasn't an ROI?

      Don't be so quick to judge when as you said not all info is out there in this article.

      As far as their relevance and/or product, I don't even drink beer and I know that PBR is on a big comeback. Is it the slow economy, or just a branding thing. Either way, has little to do with their cloud initiative . . . . if you're paying attention, PBC isn't the only company doing this exact approach.
      David McCluskey
      • "Do you honestly think they would go this route if there wasn't an ROI?"

        I have been in IT since 1990........yes I think they would. Its politics, making names for ones self, being who'ed by killer sales teams that go after CIO targets.

        I have no doubt they had some older systems and like I said they need to be upgraded. I just think any CIO that is serious needs to take a wait and look at the cloud offerings. It very early still in this "Cloud" world. Some parts make perfect sense, like email but others I am not sure yet. We hear about outages from the big 3 pretty often (Amazon, Microsoft, Google). I know our companies management would not like 8 + hours outage impacting their email access.

        I am in Grocery retail and NO PBR is not on a big comeback, unless you are living next to a place that wants cheap beer (college) and then maybe it is but its because its cheap.
        JeveSobs
        • Comeback

          Well, not sure what grocery chain your with, but Nielsen will beg to differ on their "Comeback".

          BTW, Cloud isn't such a new term, people just couldn't wrap their heads around it, and most directors/CIO's are short sighted.
          David McCluskey
    • arguable

      While not as good as microbrews, PBR is much better than Bud, Miller or Coors.

      However the idea that IT matters more than products to any company selling tangible, real world products is nonsense.
      hrlngrv 
  • PBR

    I agree with JeveSobs, I've been in IT since 1974 and I've seen all the new asst. VP's come and want to make a big change so they can make sr. vp, then the next one comes in and wants to change back so he can make sr vp.
    Stroh's used to be a good beer when they brewed in Winston-Salem, but the last one I tried to drink tasted like poorly recycled cat piss.
    Get you a kit off the net and brew your own, tastes a whole heck of a lot better.
    demoncat54
    • Thank God American beer is relatively cheap

      or it wouldn't be drinkable. That's its main (and surviving) calling card.

      Modern Yankee piss water is == NOTHING == like the quality brews the USA turned out prior to 1) Prohibition, 2) Roosevelt's heavy handed measures and ultimately 3) WWII cost-cutting frameworks, even from the bigger and better known Milwaukee breweries.

      Everything since that time has basically been transformed, and not for the better. It's gone to the dogs, even if not many beer drinkers are aware of it. Pick up an in-depth book on the history of American brewing -- it'll blow your mind.
      klumper
  • It's Funny.....

    ....how it is always mostly negative comments on blogs. I guess it is easier to be bitter than look at the big picture.

    @JevSobs firstly this was not an article on ROI it is about transformation and IT adding value which a lot of IT people have really lost sight of. If you for one second think that any project can run without ROI then you are seriously misinformed and ignorant. A very small example of ROI is a 50% reduction on email costs with the move to Google Apps and yes some users don't like it but the majority do. Oh and we have gone from weekly outages to 100% uptime over the last 10 months.

    Your other statement;
    "Sometimes I think these new guys come in and make all kinds of changes, not because something is broken but more to make a name for themselves."

    If you make change for change sake then you are not adding value and wasting precious company time and money. I'm here to do a job, fix what is broken and enable the business. Anyone just trying to "make a name for themselves" will not survive. This is not about me!

    Your comment about "the next guy" coming in and moving things back is actually accurate. If they hired a traditional, narrow minded IT Director/Admin who thinks they can build everything themselves then they will waste a lot of time and money building up infrastructure, spending capital and not delivering business value. They will not make that mistake again and luckily there are enough IT leaders out there who understand where IT adds value. A quick clue, it is not by buying and running the cheapest server.

    As for you taste in beer fair enough.
    Ben Haines
    • About Cloud Email Solution...

      Hi Ben,

      When moving the email to cloud, did you consider Microsoft Office 365?

      So what made you choose Goggle Apps over it?

      PT
      PT Lam