As the local head of IT in a global company, most of the big technology issues of the day are going to drop on your desk at some time or other. Making decisions about which ones are worth exploring is one of the challenges.
The accepted thinking within a modern IT department is to move only on the ones that matter to the business. This has certainly been the experience of Donal Manning (pictured), head of IT at Heineken Ireland.
Back in 1998, when CRM (customer relationship management) was just starting to register as the ‘next big thing’, Manning and his business team decided it was what was required for the Irish business. It was a big decision because no one else in Heineken International had rolled out CRM, but Manning knew there were unique reasons why Ireland should be the first.
“The Irish beer market is unusual. It’s very competitive and we deal with every aspect of the market. Elsewhere in the world, the brewery would handle a number of wholesalers and a small number of big distributors which means a low volume of orders. Here, we deal with every outlet and every publican,” explains Manning.
“Given the competitive nature of the market, it was critical for us to look at everything from a customer service point of view. We had to win over the hearts of our customers and we figured CRM was the tool to help us do that.”
True to the mantra of modern IT thinking, the project was commercially led. “For Heineken Ireland it was the first real acceptance by the business that something like this wasn’t an IT project. It was a business project with a strong piece of IT in it,” says Manning, careful to make the distinction.
Having looked at the CRM solutions available, Manning went best of breed and opted for Siebel. The decision made, and with everybody on side, Heineken Ireland set about major transformation projects that covered both sales and customer service, with three Siebel products: Siebel Call Center, Siebel Sales and Siebel Field Service.
“It was a huge investment and a big and risky step to take at the time but it has paid off dividends,” says Manning. “It’s not cheap but it’s a very good product suite which we have leveraged a lot over the years. We’re doing more with it now than when we rolled it out.”
The initial objective was to empower a sales force of 60 reps, regional managers and other senior management who would benefit from real time access to the customer data. The difficulty was getting connectivity to a dispersed sales force, not as easy as it sounds in an era when sending date over mobile networks was an idea rather than a reality.
The sales force was issued with laptops and had ISDN lines installed in their homes. Every evening they were expected to file their sales information after a day on the road. It soon became apparent that change management challenges were going to be every bit as important as the technology part.
“It was a big project. Prior to this, it had all been about paper and mobile phones,” Manning explains.
Another change for the sales reps was a loss of some responsibility. Decisions were increasingly made from the head office where the data they supplied was analysed and acted upon, which is good from a company point of view but hard for an experienced rep to accept.
“We got through it,” acknowledges Manning. “There was a strong vision that was communicated to people who all understood the need to move forward together.”
As wireless came along, first with GPRS and then 3G, there was a natural evolution away from ISDN to a new generation of technologies supported by O2, Heineken’s mobile service provider. Manning has nothing but praise for the operator: “In my experience they are the only company I can really point to where I could say they were a real business partner.”
What he gets from O2, and which is sadly lacking with other suppliers, is a proactive approach. “To be fair, some other vendors come in with suggestions but you have to have a solid relationship to get to a point where it becomes meaningful rather than just a sales pitch. Whenever we have had an issue, O2 responded quickly and constructively in every way it could.”
One of the ideas that came from O2 would turn into an award-winning ICT project. Heineken has 80 draught service people on the road, maintaining and cleaning the taps in the pubs. The idea was mooted that it would be good to log and record their customer interactions in the same Siebel system.
“With the draught service team, laptops didn’t make sense,” said Manning. “We wanted something smaller, cheaper, simpler and easier to support.”
O2 has the BlackBerry which fulfilled the device remit, but there was the challenge of finding a solution to run on it. Manning ended up going with Antenna Software, a US company that has a strong relationship with Siebel and a portfolio of BlackBerry solutions. The solution used – winner of a gong at last year’s BT Inspired IT Awards – is hosted in the States and delivered as ‘software as a service’ to Heineken Ireland.
The upshot is that everybody in the organisation who needs access to customer information, including the remote workers, has a full view of their history. The draught service person will know what the sales rep is doing and vice versa.
An ongoing challenge is keeping up with expectations. No sooner have employees gotten to grips with a technology, than they want it to be improved. “The reps are beginning to say they need something faster and more widespread. And as the amount of information we send back and forth across the network grows, there is pressure coming from the business to upgrade again,” says Manning.
This is quite timely because O2 is expected to launch its HSDPA (high-speed downlink packet access) network which brings broadband speeds to the mobile environment. Heineken expects to be trialing the service soon.
While Manning and his team have developed a comprehensive multi-channel CRM solution, nothing in IT lasts forever.
Oracle bought out Siebel in 2005 and while it made little difference in the short term, Manning is anticipating technology changes that he’s not happy about. “Yes, it does concern me. There was a big upgrade two-and-a-half years ago that gave us a lot of headaches and there’s one coming from Oracle where we expect a complete change in the technology,” he explains.
“That will probably be the time for us to look at moving more towards the corporate Heineken model. It is starting to push SAP CRM which didn’t exist when we first went looking at CRM in 1998.”
A more natural fit for a global organisation that has been running a SAP ERP system since 2000, the company is looking at it as an obvious extension to the core system, along with the SAP HR (human resources) module.
The ERP (enterprise resource planning) system is centrally hosted by Heineken in Frankfurt, a decision that kick-started the company’s move towards a group IT strategy. It was the first part of the business, apart from production, to operate a centralised approach – a big step for a very distributed company, with local offices left to do their own thing.
There is regular dialogue and meetings between the different IT groups, and tangible benefits are being felt in the different territories. The centralised decision-making process has already relieved local offices of procurement headaches around the desktop and it is currently looking for a carrier to take its global WAN to the next level.
For Manning, who reports in directly to his CIO (chief information officer) – based in Holland – the executive board has had a huge affect on how he operates. Perhaps the biggest decision it took was not to outsource all of Heineken’s IT function.
“For IT departments in Ireland that work within multinationals, outsourcing and the centralisation of IT have become a real issue. They have to question what their role will be in three or four years’ time,” he says. “In Heineken the belief is that people like ourselves who work locally will add value to the business.”
The rationale is that there will always be opportunities for IT people on the ground to come up with appropriate solutions to local problems, like Heineken Ireland’s mobilisation of its sales and service teams. “It’s only by sitting next to the business on a day-to-day basis that you can spot those opportunities. You can’t spot them 500 miles away,” says Manning.
The IT model that Heineken uses is based on the Gartner model, IS Lite. It describes an IT environment where non-core functions are outsourced while process-based application development is embedded in the business.
“Basically, you hive off non-value services and direct your IT team to different parts of the business. We have two account managers, one for front-end customer facing solutions like Siebel, and another for the back office,” explains Manning. “The beauty of this is that the business people know which IT people to talk to, because they are regularly in meetings with them, and the account manager knows what he needs to do to deliver value to them.”
When you suggest to Donal Manning that he has been leading from the front when it comes to aligning technology to the business and in the adoption of new technologies, he is slightly surprised. “It doesn’t feel that way but I suppose we have been fairly early adopters. I think the point is that what we’ve done has been cutting edge but never bleeding edge. Everything we’ve used has been tried by somebody else before us.”
Manning will have an opinion on most trends and puts everything through a period of evaluation. Virtualisation is a case in point. “We’ve done a little bit of work around it but I took the decision not to go completely down that road. At the moment we feel that it’s not appropriate for our Siebel infrastructure but we will use it for less critical applications as we consolidate in the computer room.”
Like many IT professionals, one area of the IT infrastructure that caused him concern was security. He recalls sitting back at the completion of a series of projects with the nagging suspicion that systems were not as tightly controlled as they should be. The security consultancy Rits came in and carried out an audit which confirmed his worst fears.
“It was pretty grim, but we put an action plan in place and a year later Rits came back and we had reached 80pc practice. We’ve subsequently won awards for our security.”
This is not the end of the story, however. “Having achieved it, I then wondered if we were overdoing it. It’s hard to tell somebody in marketing that they can’t get access to a website because it falls outside of our security policy. We need to listen to people, understand what they want and try to help them to do it,” he says.
This is something of a hobby horse for Manning. As the chair of IT@Cork, a networking organisation for IT professionals in the region, he likes to take the opportunity to explore broader issues around technology and its use. What concerns him is that the enthusiasm people develop for computers and the latest gadgets in their leisure time can be lost on the way to work.
“The consumerisation of IT is fantastic. There is now an onus on IT departments to enable people to use technologies that they are comfortable with, and to use them to bring some value to the organisation without always putting up blocks,” he says. “As a head of IT I think we need to be more open. We have to find a way of doing things securely rather than just block something because it appears unsecure.
“These are the challenges that make the job interesting,” he adds. “It’s very easy to hide behind policies and do nothing.”
“Given the competitive nature of the market it was critical for us to look at everything from a customer service point of view. We had to win over the hearts of our customers and we figured CRM was the tool to help us do that.”
“Some other vendors come in with suggestions but you have to have a solid relationship to get to a point where it becomes meaningful rather than just a sales pitch.”
Innovating in IT:
“What we’ve done has been cutting edge but never bleeding edge. Everything we’ve used has been tried by somebody else before us.”
“As a head of IT I think we need to be more open. We have to find a way of doing things securely rather than just block something because it appears unsecure.”
By Ian Campbell