Oracle gains ground at dairy giant Fonterra

Oracle has won the financials business of the former Kiwi Dairies part of Fonterra, adding to its established presence in what was the Dairy Group business unit.

Oracle has won the financials business of the former Kiwi Dairies part of Fonterra, adding to its established presence in what was the Dairy Group business unit.

NZ Dairy Group and the Dairy Board, now united under Fonterra, have historically been heavy Oracle users while Kiwi used Jade with some Oracle databases.

The deal is thought to be worth a six-figure sum, but Oracle was not saying anything about it last week. The company was in its worldwide “quiet period” preceding the announcement of annual financial results.

Rival enterprise software SAP, however, still has a significant presence in NZMP, the business-to-business ingredients side of the company, which is influential in Fonterra’s overall IT direction under IT integration project manager Marcel van den Assum. NZMP is evolving its enterprise, information and technology architectures for the new company structure in association with Accenture.

An enterprise architecture is a base-level design for the system, like the pipes and wiring for a house, to enable information services to be responsive to changing business needs, says Accenture consultant Mick Bell, who is working with NZMP.

The framework will ensure that any future added element of the system will plug in smoothly, leaving Fonterra with more freedom in choosing such components, Bell says.

“‘We can’t have your system because it’s not compatible with theirs’ is not an excuse any more.” This demand for flexibility is born of the flexible interaction of e-commerce systems, he says.

Accenture is also helping NZMP devise an information architecture, detailing how data items are used in the company’s day-to-day work and what data will be stored in a data warehouse for historical analysis.

At present, Accenture is defining “cornerstone data”, the crucial data elements needed throughout the enterprise. A particular point of debate, for example, is whether the product code should be “intelligent”, so a user would only have to look at certain digits in it to know it is milk powder, or whether the code should be a random number, with attributes as separate data fields connected to it in classic relational style.

The final area, Bell says, is the technology architecture. With the merger “we have two of some things, like network operating systems or PC brands, and three of others”, and some rationalisation is clearly in order. The ERP side of the picture, from Accenture’s and NZMP’s point of view, is all SAP, and NZMP is progressing into supply-chain planning and optimisation with SAP’s APO (Advanced Planning and Optimisation). But Oracle’s victory means Fonterra as a whole is still facing in two directions on the ERP front.

NZMP is forward-looking in establishing professional standards in business and software development, Bell says, having instituted a programme management office for the coordination of projects, something of a rarity in New Zealand companies.

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