For weeks, even months now, my colleague Ann Rosenberg has been telling me about the great customer story and business case provided by Arla Foods in Denmark, so no surprise that, indeed, Claus Qvistgaard, Arla's director of Strategy and Architecture delivered on the promise of the best customer content of my SAP Insider BPM2008 experience thus far. As a side note, Arla is one of the first ecological food companies in the world.
Arla is a consumer product (dairy foods) company with a long history of constant acquisitions and mergers. When talking about BPM the Ett Arla (one Arla) program was presented as an actual living and practical example of a company moving after mergers from a silo think to entirely changing its organizational structure. Claus described the concept of harmonization: making a common business model with processes that go across the company and very importantly creating an IT that supports this harmonization.
I've already seen a base diagram that Ann uses that delineates and maps his organization, processes and IT before during and after the mergers and changes.
Claus began by using the Dan Woods quote: "the fundamental challenge facing businesses today is to determine whether IT is the solution to problems or is the underlying program itself" (Dan Woods, Enterprise SOA 2006)
Switch out the name Arla and you can find commonalities with any organization facing issues after acquisition.
Merger posed challenges
- Data and work processes not integrated
- Many different IT systems
- Global customers have global demands
- Increased international competition
- Demand for growth and profit
- IT platform must be "future proof"
- Synergies to be exploited globally
Harmonization Goals:
- One business model
- IT systems working together
- Global master data
- Integrated work processes
Business Objectives:
- Integration
- Simplification
- Effectiveness
- Increase bottom line
- Higher quality without effort
- Efficient setup
Business Challenges:
Market demands
- Fast-moving goods with short shelf-life (duh Milk)
- Supplies are no longer stable
- Increasing emond on product quality and labeling accuracy
Cost reduction demands
- Reduce costs in all stages of supply chain
- Reduce head counts
- Reduce Number of base products
Liked his slide on standardization in the software industry showing evolution of software industry from company-unique programs in machine code on through standard services.
Arla's program was run "from the business" and had a specific steering group to harvest business benefits. You can read the full case study in the newly released Business Process Management: The SAP Roadmap just released from SAP Press. Excerpts are available here
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