NZ King Salmon takes $100m business to the cloud

NZ King Salmon takes $100m business to the cloud

IT manager Simon Gutschlag talks about moving to the cloud, and the challenge of adopting new software in a maturing business.

For one of New Zealand's largest produce exporters, the best way to describe the cloud is as a toll road: You pay for what you use and others are responsible for maintaining it. Simon Gutschlag, IT manager at New Zealand King Salmon, told the audience at IDC’s recent Cloud for Business conference that the company moved its infrastructure to reduce costs spent on maintaining internal infrastructure.

"Infrastructure for us is a road. It doesn't necessarily give us an advantage over the next salmon farmer who's also using the same road,” says Gutschlag.

“Our IT strategy is based on only doing those things that give us a competitive advantage.

“It isn’t our core business, so it makes sense to give it to someone for whom it is a strategic asset. Someone who’ll maintain it and innovate on it, and since other people are using it too costs should be lower.”

In 2010, New Zealand King Salmon started moving its IT infrastructure to the cloud.

Business-critical applications like the company's ERP, remote desktop services, Windows server update services, and business intelligence were moved to Datacom hosted servers, while non-critical systems like file storage remained on a local cluster.

Gutschlag says the company took the opportunity to add new systems required for a maturing business expanding its overseas exports, like a new CRM and more robust forecasting tools.

Chinook salmon takes three years to mature, says Gutschlag, which means NZ King Salmon works on a three year lead time so accurate forecasting is vitally important.

“Our forecasting tools were really out of date,” says Gutschlag.

"Our accountants would say everything was fine, but things were run on Excel spreadsheets. A misplaced decimal point could mean missing a shipment of feed, which would be costly."

After an investigation period and on the advice of preferred partners, Gutschlag says Microsoft Dynamics CRM and Oracle Hyperion were chosen, integrating with NZ King Salmon’s ERP.

The addition of these two new systems presented some challenges, says Gutschlag.

Microsoft’s CRM presentation server did not perform as well as he had expected, and the CRM project had to be delayed for six months while performance issues were ironed out.

NZ King Salmon does most of its forecasting during November, December and January. Gutschlag says for the rest of the year the system is relatively unused, so investing in peak-level infrastructure would have been a waste of money.

NZ King Salmon’s experience with Oracle’s Hyperion forecasting suite was generally positive, but Gutschlag says CIOs need to be wary of vendors trying to sell them more than their business needs.

"Oracle, when it came to signing the hardware it required wanted crazy amounts of resources," says Gutschlag

"We've toned down their recommendations and it's worked absolutely fine. So far we haven't had to dial it up."

Last year, NZ King Salmon exported 8000 tonnes of Chinook salmon (also known as king salmon) from New Zealand salmon farms, accounting for 55 percent of global production. The Nelson-based company has 450 staff in 15 locations, and has an annual turnover of more than $100 million.

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