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.
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.
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.