Most of Fonterra’s IS staff who have been offered jobs at new outsourcer EDS have accepted.
The plan, according to Fonterra CIO Marcel van den Assum, was that more than 130 Fonterra IS staff would be offered jobs at EDS. As many will remain with Fonterra.
“We’ll have 100 to 150 project management, applications and commercial IS staff, evenly split between Auckland and Hamilton.”
EDS spokeswoman Adrienne Perry said last week that 113 ex-Fonterra staff had accepted positions at EDS and more were expected to join in coming days. The transition will happen in March. Most would be based in New Zealand, but some would be working overseas.
Van den Assum says for the remaining IS staff at Fonterra, “it’s business as usual”.
Last year Fonterra signalled a shift northwards, taking new premises in downtown Auckland and moving IS staff from Wellington to Auckland, Hamilton and Palmerston North. Of Fonterra’s then-320 fulltime IS staff, 130 were based in Wellington. “We’ve had a more than 50% hit rate of people wanting to move north and are working with the others on transferring their skills,” van den Assum said in December.
As for the transfer of Fonterra’s IS infrastructure to EDS in March, it’s all on, van den Assum says.
“You can’t just sit back and relax,” he told Computerworld last year when Fonterra struck its $590 million, seven-year outsourcing contract with EDS. “You have to move on to the next phase.”
The next step involves EDS taking control of $44 million worth of Fonterra hardware and utility software. “They’ll provide us with services from those assets on a pay-for-fee basis. We’ve transferred assets that were on our books that we couldn’t fully deploy and it’s EDS’s responsibility to rationalise and consolidate them so we get the best service from them.”
All hardware, networks and infrastructure software such as email, directories and operating systems will be managed by EDS, but Fonterra will retain control of business software such as the SAP applications that comprise Project Jedi, the exercise in rationalising business systems from the dairy companies that were merged to form Fonterra.
Telecomms and networking is an area with much scope for upgrading, van den Assum says.
“We see opportunities to move into IP on a broad basis, including VoIP, but it’s not at the top of the list. We’re looking at 12 to 16 months before we’d be able to fully capitalise on that technology.”
The potential is there to move data networking to an IP virtual private network, but the earliest commencement date on work towards it would be “six months out”.
Fonterra’s global networking needs are supplied by Equant, mainly via frame relay, and while Telecom and AT&T will work with EDS on the telecomms and networking side of the outsourcing deal, Equant may still play a part.
“We believe Equant will have a role — they’ve done a good job and we’ve asked them to engage with EDS. Between them, we’ll leave it to them to work it out.”
Utility computing, that much-touted concept, will be part of the outsourcing plan.
“Our vision is to have a global IS infrastructure utility. The utility concept has various components, such as pay-as-you-use and standards.” It also encompasses SLAs and putting desktop technology into a simpler standard set of services, van den Assum says.
“EDS is working towards that and to achieve it, new technology needs to be introduced. “It won’t be put in place tomorrow; it’ll take time, but we’re convinced it’s the right thing for Fonterra and that technology trends support it.”
Deciding whether to outsource and selecting an outsourcing partner was a year-long exercise and van den Assum says there were eight objectives when Fonterra set itself the task.
The objectives included the establishment of the vision, achievement of the IS infrastructure utility and a different approach to aligning value and cost, he says.
Getting the right infrastructure to support Fonterra’s business applications environment was one of the most important objectives.
“We needed an infrastructure that was right to support project Jedi.”
Project Jedi is progressing to schedule and is set for completion at the end of the year, when the disparate legacy systems from the Dairy Board and the dairy companies that preceded Fonterra will be replaced by SAP packages for supply chain, CRM, customer service, HR and other areas.
The legacy applications “have been used in the meantime to support Fonterra but aren’t the right products going forward”.