Case Study: Raising a glass to IT alignment

Diageo's IT organization is going through a period of change. At the core of our transformation is our vision of complete IT and business alignment. We're on a journey to become a seamless extension of our business, helping to drive top- and bottom-line growth.

Formed in 1997 by the merger of Grand Metropolitan and Guinness, Diageo is the world's leading premium drinks business, encompassing top brands such as Smirnoff, Johnnie Walker, Guinness, Baileys and Beaulieu Vineyards. And while Diageo trades in more than 180 territories globally, North America represents some 37 percent of our operating profit.

When I joined the company as North America CIO in 2001, we were in the midst of our Seagram acquisition and had just sold our Pillsbury and Burger King units as part of our strategic realignment behind premium drinks. This rapid series of mergers and acquisitions left Diageo with disparate systems, environments and technologies. We needed to establish a common foundation across our business units through an integrated platform.

My first task was to integrate our networks and systems with those of the newly acquired Seagram business. Part of this effort involved delivering a standard operating environment to all 3,000 Diageo North America employees. Everyone now uses a Compaq Evo laptop or desktop running Windows 2000, Outlook 2000 and Office 2000 software. We also standardized desktop images to cut down on unsupported software installations. With Managesoft 6.9, we can upgrade systems and software all at once and remotely, whereas previously this was a manual process. Our employees have greater mobility and are able to work seamlessly from any of Diageo's 150 locations worldwide.

We implemented SAP in 2002 and embarked on a multi-phased effort to standardize our infrastructure from four ERP environments to one and build a common operating language across our business. In 2003, we decided to outsource our global infrastructure and technical support services to IBM Corp., and the development of one ERP platform to Accenture Ltd. This wasn't just about cutting costs; it was about finding the right partners with the right mix of technical expertise and capabilities. Engaging IBM and Accenture has freed up my team of more than 140 IT professionals to design and deliver solutions aimed at the front end of the business.

We created an engagement role that is dedicated exclusively to building relationships and working day-to-day within the business to truly connect with our brands and their goals. For each of Diageo's 11 functional business areas, there are one or two engagement liaisons who identify opportunities where technology can add business value.

The sheer volume of projects our IT organization manages spurred creation of a North America IT Project Management Office. When I came onboard, there were 128 active projects underway. We had to prioritize to ensure we made wise technology investments.

We have 34 active projects in North America, all reviewed and approved by a cross-functional executive steering committee. Every initiative is evaluated based on its business value, including revenue enhancement, cost reduction and business-focus alignment. This helps us ensure the IT team is truly focused on driving growth across the enterprise.

Understanding our business

People are our greatest asset, which is why we heavily emphasize continuing education, including Project Management Institute certification and participation in technology and business courses.

Diageo's Biz Eye program was created to bring IT closer to the business through marketing and brand presentations and product demonstrations. Our IT team members also spend time helping administer customer surveys and assist with merchandising to experience firsthand, for example, what the holiday season is like for our sales teams.

Networking activities that connect us with our peers can yield valuable insights. I encourage my team to get involved in executive leadership programs like the Society for Information Management's (SIM) Regional Leadership Forum. I am active in SIM's Advanced Practice Council CIO workgroup and serve on the board of Green Mountain Coffee.

Working closely with the business, we have invested in technologies that are helping expand Diageo's brands, such as tools that help our sales teams and distributors make more informed decisions. A full SAP implementation, now complete for our spirits, Diageo Chateau & Estates Wines and Guinness USA businesses, has improved our ability to manage and record transactions. ERP tools and Web-based technologies also are enhancing our supply chain by streamlining the order and shipping process and speeding delivery times.

We recently launched a world-class business intelligence platform, Power to Market, or MPower, that serves as a unified foundation for analyzing financial and customer data. By providing a single data warehouse repository for customer and sales metrics, the system increases overall productivity. Nearly 1,000 North America employees have access to MPower, with the ultimate goal of offering the tool to our strategic distributors starting in 2006.

Strategic technology investments such as these are helping Diageo create a more efficient sales and distribution process. We also recently established a Distributor IT Council of CIOs from our strategic distributors in North America. The CIOs meet directly with our IT leadership teams to collaborate on defining technology strategies and addressing the technological challenges that face our collective businesses.

Our IT team also plays an important role in advancing Diageo's commitment to social responsibility, which is woven into everything we do. All Diageo brand Web sites comply with country- and even state-specific advertising and marketing regulations. We also confirm that site visitors are over the legal purchase age for alcohol beverages in the state or country from which they access our sites.

In an increasingly competitive spirits marketplace, investment in technology is a central part of our global strategy. We now have the infrastructure and tools in place on the back end. Our ability to deliver information and integrate data will be the driving force behind our future growth.

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