What is Fonterra doing?

Fonterra remains tight-lipped over the setting up of its digital architecture for the new merged company.

Fonterra remains tight-lipped over the setting up of its digital architecture for the new merged company.

Hamilton-based New Zealand Dairy Group, a key component of the new company along with Kiwi Co-op Dairies and the Dairy Board, played a game of pass the parcel with Computerworld, eventually transferring us to Matthew Hootton of Fonterra in Auckland, who failed to return calls.

NZDG spokesman Alan Mcdonald says developing the new firm’s e-commerce architecture is “very much a work in pro-gress”.

“Virtually all of your enquiries are either being worked on or considered at the moment and it is inappropriate for the Dairy Group to comment at this time,” he says.

Sorting out the IT infrastructure for what will be New Zealand’s largest corporation will be a big job, bigger than the Police INCIS system, said one IT expert, who requested anonymity when he realised this might not be the industry’s best example.

Certainly how the system operates will have a major impact on New Zealand’s exporting capability and will need the buy-in of all its users — virtually the nation’s entire dairy farming community.

What we know so far is that KPMG Consulting produced an audit and “descriptive analysis” in April, covering the IT systems of the three entities in the merger.

The systems were described as “fairly elaborate” by dairy IT consultant Doug Wilson.

The Dairy Board and Dairy group are both heavy users of Oracle and Compaq, while Kiwi runs on Jade and Compaq, using some Oracle databases.

One industry insider told Computerworld that the new merged system will create a transparent value chain, “providing a view from cow to customer, with no hidden profits along the way”. The source says this means the companies will most likely “be forced to start with a clean sheet of paper”.

Once merged, the firms, whose combined values exceed $12 billion, expect savings of more than $300 million a year, with $33 million coming from supply chain efficiencies.

While we cannot report exactly how Fonterra are making their e-business changes, Microsoft and IBM proffered some advice for the dairy giant.

Microsoft’s Mike Peters says greater collaboration and communication between the different customers and trading partners means managing the flow of data will be key.

Hence enterprise application integration (EAI) tools will be “a necessary pre-requisite for effective B2B models”, he says. “It is necessary to ensure internal applications can communicate with each other before exposing your business to your trading partners and customers,” he says.

Consequently CRM and ERP systems must be linked, call centre and customer applications must have a unified view of customer data, and different service divisions must access and update the same database, he says.

IBM’s Gary Elmes tells Fonterra to be “hard nosed and practical” about its core competencies and technology differentiators. “Keep in house any technological asset or competence that your business strategy compels you to keep tightly under control. Buy in everything else as a service.

“Strive to be easy to do e-business with.” This means building e-business capabilities that suppliers and customers can access using open web-based protocols.

Even if you can’t say with any certainty what you will want your infrastructure to do next year, build an infrastructure that does what you need today and can be extended to do what you need next year, Elmes says.

Finally: “Avoid being tied in with single-vendor technology.”

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