Striving for Synergy

The elevator doors opened to a sprawling Red Stripe Beer display, an attractive summer promo piece sprinkled with sand, beach gear and cases of Jamaican's finest suds. Assistant Editor Alliston Ackerman nudged one of the cases.

"Real beer," she said.

"Interesting," I said.

Before I could let myself surrender to thoughts of sipping ice-cold beer on a sun-drenched Jamaican beach, I shook my head back to reality, which was Stamford, Connecticut, home to Diageo North America. I was here to interview Barbara Carlini, the company's chief information officer for North America. In just a few short years, Carlini has miraculously corralled the company's disparate IT systems, inherited through multiple acquisitions, and placed them neatly under one, global footprint. No small task, considering that Diageo North America is a division of Diageo plc, the world's largest producer and marketer of premium alcoholic drinks. North America is also Diageo's largest market, where its unmistakable brands like the aforementioned Red Stripe Beer, Guinness, Smirnoff vodka, Jose Cuervo, Baileys, Johnnie Walker, Tanqueray, Crown Royal whisky, Beaulieu Vineyard wines and Captain Morgan rum, among others, continue to make a positive impact on consumers. So how does one go about obtaining company-wide synergy across such a colorful and challenging landscape?

Background Check
For starters, experience helps, which Carlini has plenty of. With stints at Kraft and Nabisco under her belt, Carlini says it was time spent tackling large projects and program management at ADP for eight years that taught her the most valuable lessons in crisis management.

"When payroll is down nationwide, you're affecting the economy," says Carlini. "At ADP they really develop crisis managers." Carlini says the program management at ADP not only honed her holistic chops but also taught her to take very complex situations and break them down into smaller, manageable pieces, which is exactly what she is doing at Diageo. "When I first came to Diageo, SAP had just begun, we did not have a project management office, we hadn't prioritized our projects and there were 128 projects on the list," says Carlini. "It was just unmanageable."

Besides the systems being very disparate, Carlini admits the company's technology was "a bit behind the times" when she first arrived. "Essentially, everyone was on a separate system," says Carlini. "The applications were very old and customized." Separate systems meant that Diageo couldn't see the data across its business, a natural result of prior acquisitions.

"At the time, Diageo North America's focus was to bring in new companies," says Carlini. "We soon realized if we are going to move forward--really drive top and bottom line growth for the company--we absolutely have to get integrated platforms in place."

Luck of the Irish
Around this time, Diageo started looking at SAP to handle its ERP platform needs, which was already up-and-running in its Ireland operations. "We wanted to have global processes," says Carlini. "We wanted to do this right for the entire company, using two instances, one for the UK and one for North America. We are now working towards a common platform for the rest of the world."

This platform includes a standard desktop/laptop and full SAP integration, now complete on the spirits side, the largest part of Diageo's business. Recently, SAP was uncorked in Diageo's Chateau & Estates Wine business. Carlini estimates that its U.S. SAP rollout will be fully complete following Guinness USA's launch in October. Diageo has also implemented an SAP-compatible Data Warehouse that collects sales, marketing and financial data. "We're bringing in our financial data so that we have one data source, one powerful warehouse, the foundation of which is currently in place," says Carlini.

The Value of SAP
With the SAP investment, Carlini says the end goal is to create standardized processes and systems and build a "common operating language" across Diageo's global strategic agenda. ERP tools have enabled Diageo to enhance its supply chain, streamlining the order and shipping process to increase sales and speed product delivery times. The SAP investment will also help Diageo to strengthen its relationships with distributors by creating a more efficient sales and distribution process.

"The number one benefit we've received from SAP is the integration," says Carlini. "We have an integrated system now, whereas before, each department was working independently, which was inefficient. Supply people, for instance, now spend more time out in the field trying to understand how they can improve their customer service."

People Part of the Equation
"Change management is absolutely the most critical aspect to implementing SAP," says Carlini. "You can put in the best system, but if people don't realize they need to get out of their silos and talk to each other, it's not going to work."

As a firm believer that the business has to take ownership of the project, Carlini put together an operating committee that represented supply, finance and every other major function within Diageo. The operating committee would make sure that the right decisions were made and issues were resolved. Unresolved items were brought to the attention of the steering committee, made up of the CEO, Carlini and heads of supply, finance, HR and other business units. To make it work, Diageo holds mandatory online and offline training classes when new technology is implemented, and identifies super users of the system, who act as the first line of support.

Consider the Source
Diageo is also reaping huge efficiencies due to Carlini's decision to implement Project Homerun, a program that delivered standard equipment (laptops, PCs), to Diageo North America. This effort has enabled all Diageo North America employees to work seamlessly in any Diageo location. Diageo software upgrades are now conducted from remote locations and can segment specific departments. Profiles are set up in a lab so that specific employees can get the right software. Standard laptops and desktops also means the entire Diageo organization can receive an upgrade at once.

"We can use software to send updates to the entire workforce of about 3,000," says Carlini. "We also lock down the laptop image so employees couldn't install unsupported software. This resulted in reduced support costs." Standardization also prevents licensing violations by removing the ability for employees to install items on their computers that do not belong. "Now, we're going toward a global standard desktop/laptop," says Carlini. "As we become more efficient, we can reinvest the savings and become a growth engine for the business."

Key to Collaboration
The Collaborative Planning, Forecasting and Replenishment (CPFR) program enables Diageo and its trading partners to integrate the entire business chain, from planning and distribution to inventory control.

CPFR is a Web-based solution that shares forecasting and replenishment information with key distributors for Diageo Guinness-USA (DGUSA). Distributors can collaborate and inform us if we're on target with forecasting and replenishment, in close to real time, enhancing overall supply planning. Prior to CPFR, forecasting for DGUSA was input on a spreadsheet and through calls. The new system has helped the sales force free up 20 percent of its time. It also enables Diageo to better manage inventory, providing near real-time visibility into its strategic distributor supply.

By improving how it manages and monitors inventory flow, DGUSA now delivers a higher quality of beer freshness to its customers, while significantly reducing the time its sales force spends on inventory and order-related activities, allowing them to focus more on revenue-driving activities.

"We are definitely excited about this," says Carlini. "We have about 30 Guinness-USA distributors on this CPFR system. It allows us to see their inventory and look at the sales projections and then really drive supply chain efficiencies between Diageo and the distributors. We plan to move further into it with our distributors and perhaps roll out into the spirits sector."

Solid Structure
In the midst of its massive SAP implementation, Diageo decided to outsource its technical support infrastructure to IBM and also outsourced SAP support and development to Accenture. On the infrastructure side, Diageo transitioned employees into IBM. "The advice I'd give to any CIO, is when looking at an outsourcing deal, you have to balance what's right for your company with being open and honest with your team," says Carlini. "If you are honest and treat your people with respect, they will, in turn, respect you for it."

Carlini deems Diageo's migration to IBM and Accenture well positioned for success, primarily due to the strong sense of mutual ownership and teamwork that is shared between the organizations. "Any time you get into a relationship with a vendor, you really need to become a partner. These are individuals that have to deliver for you," she says.

Accenture and IBM reps sit on the Diageo leadership team. Carlini does not distinguish between them and the rest of the Diageo group unless sensitive company info arises. "My leadership team hosts community spirit and team building events, and everyone is invited," says Carlini. "Our IBM and Accenture colleagues are treated no differently than any other employee."

People Agenda
Carlini's agenda for the future is focused on empowering her IT team to succeed. By placing an emphasis on continuing education, including PMI certification, along with a strong focus on project prioritization against business processes, Barbara has built an IT organization that delivers quality programs that are closely aligned with Diageo's business priorities.

With this agenda, Carlini has started two initiatives to get IT even closer to the business. First, she is building a program to educate IT on Diageo's business strategy, processes, marketing and brands. Second, she is aligning IT's organizational structure itself with the business, including IT roles that are dedicated exclusively to building relationships and working day-to-day within their respective business functions.

"Technology decisions should only be driven with a strong understanding of the business need," says Carlini. "In order to be truly aligned with Diageo's business agenda, your team must understand and be able to communicate with the business on the same level. This will, in turn, transform the role of IT from a support function to that of an essential business partner."

Focus On Information
In 2005 and beyond, Carlini says Diageo's focus will zero in on information. Now that a majority of the company's information from finance and supply filters in through SAP, the question becomes how you take that data and use it to drive consumer insight. Information is a critical asset that can empower Diageo to analyze market trends, identify new target markets, better understand consumers, and ultimately, outperform competitors.

Guinness-USA recently piloted a tool that allows information to be pulled from different places like IRI or Diageo's data warehouse and automatically create a presentation for a distributor. "Before, people would get need to manually retrieve data from different sources to compile before even starting analysis," says Carlini. "This tool standardizes data and takes unnecessary work away from your sales force," she continues. "Our sales force can spend less time crunching numbers, and focus on selling our products."

Customer Comes First
The next strategic step for Diageo involves an intense focus on its consumers and customers. "That's what I am most energized about right now," says Carlini. "We've got all of our platforms in place. Now it's time to take this to a new level." According to Carlini this new vision will be powered by pulling in groups of people and workshops to leverage Diageo's strengths to outpace its competitors. "I am very excited to be done with SAP and move onto initiatives that really drive top and bottom line growth of our business. That's where you really can make a difference for the company."