CIO 100: Fonterra

FONTERRA’S GOAL IS to build a globally relevant dairy co-operative making a difference to the lives of two billion people by 2025.

This goal, part of a 10-year strategy refresh that was unveiled mid-2015, revolves around the V3 Strategy: volume (milk production), value (provide high value products) and velocity (executing this strategy at speed).

This is the backdrop in which the ICT team operates.

Fonterra has a global IT team of around 220 people. This number reaches 1500 when including partners in application support and project delivery, says Joshua Bankers, general manager ­IS global delivery.

Fonterra has a new CIO, Gerben Otter, who came from the Dutch dairy co­operative Royal FrieslandCampina, where he was programme director, business transformation and before that, its CIO.

Bankers, who provided the information for this year’s report, says ICT programmes ahead are focused on delivering commercial value to the whole organisation through projects geared towards driving “cash bene.ts and sales”.

He says ICT is also doing a lot more projects with marketing, “predominantly in the digital space”. These include customer experience technologies for CRM and e-commerce systems.

Another major programme of work for ICT is Fonterra’s traceability programme. This two-year programme covers systems around food safety and tracking and tracing of batch products from source destination through to customers.

Bankers says IT-driven projects include the global transformation of the network, desktop rollout and implementation of the procurement solution from SAP Ariba.

“We are also implementing receivables, processes and associated systems globally to replace the systems that were ran locally,” says Bankers.

The ICT team is involved in the rebranding of the RD1 retail chain, which was acquired by Fonterra nearly .ve years ago. Fonterra has renamed the business NZ Farm Source and is introducing new digital technology and on-site support for members at the stores. From an IS perspective, Bankers says this means pulling the group’s systems into the Fonterra network, and providing them standard support models.

Fonterra’s ICT teams work on projects that are in the $5 million to $10 million or above range and those around the $500,000 mark. Bankers says there are around 80 projects “in flight” for the second category.

ICT is also working with the other business units on projects around the digital space. Last year, Fonterra held a competition involving startups to pitch projects that will help the farmer members lower their input costs, save time or increase productivity. “We are trying to get engagement from the wider community, asking ‘what else can we do to bring innovation in?’”

The IS operating model has moved towards a ‘two-speed’ model, which involved setting up a team to drive the organisation’s digital strategy.

Bankers explains this part of the IS team is driving “high speed” implementation or a “faster to market” model for IT.

“We have got almost two ways of operations now in terms of project delivery,” he states.

Whatever methodology is used, he says every project has a business case that needs sign off.

“But for the ‘high speed lane’, we have a cut down version which still ticks all the boxes from a governance perspective, but is [delivered] a lot quicker to market.

“If we have made an assessment and agree with the business unit, we can take more of a risk approach towards a project, and get on with it,” explains Bankers.

He says this approach is predominantly used on projects across systems like Salesforce and content management system for the website.

He says while this diversification is ongoing, the two streams of IT have to come back together. “That is my view on two-speed IT.”

The Internet of Things is a space Fonterra is working on with some of the company’s partners, he states. One key area is collecting data from the milk supply monitoring. This initiative, he says, is linked to the move to deploy cloud-based analytics.