At Del Monte Foods, best known for its canned fruit and vegetables, work with consultants from Accenture has helped cut the company’s IT spending by over one-third.
That’s good news for executives at its Philippines-based parent company, Del Monte Pacific Limited, who are pushing the US subsidiary to reduce its considerable debts, streamline its operations and cut costs.
During the 2018 financial year, these pressures led to the closure of two US plants, but further efficiencies are still needed at the Walnut Creek, California-based company, which accounts for around 75% of the overall group’s $2.2 billion annual revenues.
IT lends a hand
Looking for ways the IT department could contribute to the effort, CIO Chad Anderson decided some two years ago that moving to the public cloud would not only help to realize significant cost savings, but also give he and his team better visibility into IT spending, too.
Working with Accenture, he oversaw the migration of over 200 servers to the Amazon Web Services (AWS) cloud in under four months, with the team involved managing to avoid disruption during Del Monte’s key harvesting and canning seasons.
The scope of the systems involved is impressive: around 40% of the application footprint consists of Del Monte Foods’ core SAP systems; a further 30% is made up of its Red Prairie warehouse management system and a bunch of SQL-based custom applications; the remaining 30% is accounted for by support systems for infrastructure management, cybersecurity, directory services and so on. This mix had a strong bearing on the decision to go with AWS, says Anderson:
Once we had decided on moving to the cloud, we were pretty much dead set on AWS from the start - and one of the big reasons for that is that, at the time we were making the decision, there was really nobody else that could host all of our systems. Microsoft was not there. Google was not there. And specifically, AWS has a very strong partnership with SAP and they’d gotten certified so that you can run very large workloads on the AWS platform that are SAP-specific.
For the speedy and relatively hitch-free migration, meanwhile, Anderson credits the Accenture teams expertise and experience in complex and mission-critical migrations to AWS. One of the most challenging aspects of these kinds of projects, he says, is that it’s never a simple ‘lift and shift’ job:
You can’t move your systems over one by one, because of the integration between different systems. So we treated it like a layer cake. So all the production systems needed to move together and we moved all the dev systems at one time, and all the test systems at one time, too, and that’s how we learnt to make it all ‘talk’ to each other again, once it landed in its new home.
I think we had a pretty good plan, and I’d say we followed it about 70%, but once we started to move stuff across, you know, we ran into lots of different little challenges. We had to kind of adjust our approach and certain things took longer to copy than others. There was all sorts of troubleshooting that had to go on and there were certainly some tense moments, but when the actual cutover arrived, although I’d prepared myself to be up all night if necessary, I was actually hanging out by the hotel pool with the team in Manila.
The benefits have clearly been worth the headaches. That 35% cut in IT spending comes mostly from moving away from capital expenditure on physical servers and instead paying only for the infrastructure Del Monte Foods needs. As a result there’s still been investment available to spend where it counts: a refresh of the company’s network infrastructure, for example, and a tightening up on cybersecurity. Says Anderson:
We’ve freed up capital and we’ve freed up op ex and we can focus now on other things. We’ve also been doing a lot of work on improving analytics. What I would say is really nice here is that, once you’re in AWS, you have access to a whole ecosystem to tools that are designed to work in interesting ways with your data in the AWS environment.
So being on that platform allows you to play with all the new tools - and if you’re stuck in a place that isn’t built for that, you just don’t have the opportunity to utilize Redshift, or even some of the SAP tools like Leonardo or Hana. I really feel with this move we’ve opened ourselves up to be able to use a lot of new and different capabilities that just weren’t open to us in the past.