Providing global support to a leading Confectionary firm
Providing global support to a leading Confectionary firm
The world’s leading confectionary firm, one of the oldest, and also one of the leading soft drinks companies in the world, with over 55, 000 employees, recently makes a major acquisition. While this firmly entrenched its position as the global market leader, it also means a fresh set of challenges vis-à-vis consolidation and integration challenges – including the savings targets from synergies in cost and revenue, pegged at US $ 125 million and 60 million respectively. Concurrent with the acquisition in February 2003, the firm announces a comprehensive management and organizational change including the consolidation of nine operating units into five larger regions spanning the globe.
Within this environment, the IT department of the client reviews its application support activities and expenses in order to pave the way toward effective utilisation of resources and optimisation of costs. The need for an offshore software development centre is highlighted during this review.
The firm’s initial engagement with HCL started with a six month pilot project to validate the thought of offshoring and optimise costs. On the successful completion of the pilot project and several transformational suggest xzions, HCL was awarded the stage two of the initiative, which was Global (US+ EMEA+ APAC) application support and maintenance. The second phase comprised of global outsourcing, which was much larger in scope and covered a major part of application maintenance and enhancement work for the client’s application portfolios.
From here to the long term engagement that HCL undertook, was a short step.
Searching for the right recipe
The key issue was cost reduction across various heads. Operational costs were a constant challenge as was the total cost of support, since all support was provided by external contractors. In addition, a dynamic, operationally flexible cost structure was required that would be able to weather, demand peaks and downturns.
There were several aspects to global application maintenance and enhancement work for the client’s application portfolios. An optimum engagement model needed to be defined and validated, including staffing changes, meeting SLA and support requirements. In addition, the same process needed to be applied to the financial model to bring down the total cost of support by reducing overdependence on contractors and leveraging the availability of a global talent pool.
The best mix
The approach was to identify itself completely with the main business objective – It was clear from the outset that offshoring the support systems in conjunction with onsite would maximise value for the company.
An initial analysis was undertaken to understand the company’s IT structure and assess the talent available in their IT resource pool. After that the ticket volumes and types were analyzed in order to prioritize the applications. Pools of technological talent were created to aggregate technology and the solution was ready to be rolled out.
The client initially wanted SAP support only for its US operations. However, keeping in mind the client’s business objectives and future growth support for other geographies was recommended to enhance the efficiency and increase savings. HCL offered both, a talent pool with domain expertise, as well as a global support system.
Something smells good – moving towards an optimal solution
Focusing on operational excellence, a six-month pilot offshore delivery centre especially for North America, was recommended. The successful completion of which evolved into a fully operational, global ODC supporting the client in al zl its five geographical regions.
The effective service delivery model that was put in place is today providing global support to the customer through a dedicated 300 seat state-of-the-art global delivery centre for the customer, operating in three shifts providing round-the-clock support for their business critical applications. This provided the basis for the operations transformation that the client undertook subsequently.
The operational excellence was also evident in the successful support to a complex and large IT portfolio with a total of 350 plus servers, more than 40 SAP landscapes, 200 plus DB’s, and Database sizes ranging from 300 GB to 2.3 Terabytes in SAP supporting a user base of 40,000 was handled and supported successfully. The technology spectrum included SAP, Decision Support Systems (SAP BW, Oracle and Salient) and Middleware. HCL also accomplished a mammoth task of supporting more than 200 websites for the client.
And it sells like hot cakes!
Going beyond the arbitrage-generated savings and access to a global talent base, the client has benefited tremendously from the engagement.
The main benefit accruing to the client has been the round-the-clock global support in the form of the application support and maintenance. The support systems are highly flexible, even allowing a ramp up of over 100 resources in the short space of two months to keep pace with the expansion of the company. A dedicated staff of 200-300 supports the internal system with 95-100% SLA compliance (SAP ABAP support with 100% compliance to the SLA and SAP Basis with 95% compliance). Servicing 1000+ tickets (while adhering to strict closure times for each ticket) on a monthly basis, seamlessly across multiple geographies, dependency on contract employees was reduced significantly. Importantly, multiple technologies and practices were also integrated seamlessly into a single window for the customer and translated into a clear cost benefit to the client.
The street ahead...
The relationship that started with a six-month pilot project and reached to global level has only being growing in tandem with the company’s growth and expansion plans as it explores fresh geographies.