About 10 of New Zealand Milk’s 37 overseas operating companies are involved in its recently signed deal with PeopleSoft and will migrate to PeopleSoft Enterprise One over the next three years, says NZ Milk CIO Ron Peake.
“Three were already JD Edwards customers at the time of PeopleSoft’s takeover and two were about to sign with JDE when we did the PeopleSoft deal,” says Peake.
The first to go to Enterprise One, People-Soft’s iteration of JD Edwards’ OneWorld, will be Australia’s Bonland Dairies.
That implementation is set to be finished by the middle of next year. The remaining operating companies will switch over in the coming three years.
Over the past two years, NZ Milk, a division of Fonterra, has adopted a three-tier structure for its operating companies’ ERP systems, with the smallest choosing Accpac, midsize JDE and the largest two, which turn over more than $1 billion, SAP.
Peake says it’s all part of an IS architecture put in place over the past two years that also includes applications such as Pivotal for CRM in most of the operating companies.
“The systems talk — we’ve worked out the interoperability.”
He says PeopleSoft’s takeover “has complemented our selection of JDE”.
A challenge facing the implementation plan over the next three years is that NZ Milk’s portfolio of operating companies isn’t static.
“There may be more set up during that time, or some may drop off. This year, we bought Britannia in India, for example.
“The fact that companies can come and go is another reason for standardising the IT infrastructure.”
NZ Milk aims at keeping 80% of that infrastructure generic, “but because they’re local companies, we’ve had to get application suites geared to their [total cost of ownership]”.
The two operating companies big enough to be running SAP, in India and Chile, are joint ventures “and had SAP when we went into the joint venture”.
With Fonterra also a significant SAP user, possibilities for the NZ Milk companies which use SAP to commercially leverage off Fonterra’s SAP have arisen, Peake says.
NZ Milk is the marketing and brands side of the business, Fonterra the ingredients side. NZ Milk is Fonterra’s biggest customer, talking 30% of its raw dairy output.
Nestle is Fonterra’s number two customer.
Peake would not reveal the value of the PeopleSoft deal.