Fonterra expands its SAP platform

Fonterra expands its SAP platform

Project coversconsumer brand business and manufacturing plants in ANZ.

Dairy co-operative Fonterra is about to kick off a $110 million project that will convert its consumer branded business, as well as manufacturing plants in Australia and New Zealand, to systems based on technology from business software maker SAP. A team of executives and technology specialists is being put together to run the project. The implementation is expected to start in August and take three years to complete.

Fonterra already uses SAP software to support many of its business processes including global sales, planning, supply chain, customs and shipping documentation, finance and human resources.

The dairy group's chief information officer, Chris Barendregt, says the aim of the project is to increase efficiency and improve performance by further integrating business processes and systems.

Fonterra spent about $NZ230 million installing SAP software in a program of work dubbed Project Jedi, which was completed in 2006. It had planned to move all of its business across to SAP software but then scrapped the idea, saying it was not a priority.

The technology aspect of the new SAP project will be run by information services director John Kelvie, who joined Fonterra last month. Fonterra is putting together a business team to work alongside Kelvie and is hiring up to 30 senior IT specialists.

"These are challenging roles, but we expect wide interest among IT professionals including enterprise architects and functional consultants because what we're doing offers real breadth of career development opportunities," Barendregt says.

"We look for strong consulting skills in our people to provide this level of high quality support."

Prior to Kelvie's appointment, former Coles chief information officer Peter Mahler did a six-month stint as acting CIO for Fonterra's local operations. His role was to do foundation work on the SAP project and help the organisation find a program director capable of leading it.

News of the Fonterra SAP project is the latest indication that business is reinvesting in IT after many projects were suspended during the global financial crisis.

Harvey Norman finally kicked off a $50 million transformation program in May after shelving it last year. The project will replace all the retailer's core business systems over the next five years.

Banks, telcos and large government agencies all slowed or stopped work on non-essential IT projects during the downturn, but returning business confidence has seen many of them resumed. These projects and new ones leave CIOs scrambling to find the skills to get them completed.

The relatively sudden economic turnaround is also fuelling fears of an acute skills shortage. Recruitment firm Hudson says the hiring intentions of IT employers reached their highest level in almost two years during the June quarter. MIS Australia

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