Brian Franz, CIO at beverages giant Diageo, discusses the challenges of global business processes, consumer technology and digital marketing.
Diageo, with brands such as Guinness, Baileys, Smirnoff and Gordon's Gin, Diageo operates a global IT operation. In a keynote presentation at the Gartner Business Intelligence Summit 2011 in London, Brian Franz, CIO at Diageo, looked at the role of IT in driving forward innovation.
While IT at Diageo has a global operating model, Franz says that Diageo's IT function offers functional ownership. This means IT professionals have a real understanding of what the business does. "Our IT professionals in marketing should be as good at marketing as a marketing professional."
Diageo uses a single instance of SAP. Franz believes the more the business understands the processes across the organisation, the greater the business benefits, such as driving customer satisfaction. "If you don't understand the processes it is a real issue," he says.
Running a single instance of SAP is one approach to making sure the business processes are the same around the world, but Franz believes the days of big bang ERP is long gone. He says: "Tangible value is about process and data. IT sits in a place where it can see everything. Common processes gives you the control environment across the world and will help you when governments change the rules."
The company works with a handful of key service companies which run 70% of the IT operations.
He admits outsourcing has not always gone smoothly, but since the downturn, outsourcing has given Diageo IT greater agility. "Efficiencies are pretty important. We need a variable cost structure, so that we could deliver services with speed and agility. There was a time when outsourcing IT was very difficult, but when the economic downturn hit, it was a blessing." Outsourcing allowed Diageo to look at variable cost structure. "The outsourced model has allowed us to scale back areas and ramp up others," he says.
The digital world
According to Franz, it is hard to justify increasing spending in a digital world, but everyone is shifting marketing spending to digital media. He says: "The data explosion is fuelled by digital marketing. You need tools to put this data in one place."
In the digital world, Franz says IT needs to figure out how it deals with the ideas that the marketing organisation comes up with.
One example of the sorts of challenges IT now faces is the Smirnoff Nightlife Exchange campaign, which ran on Facebook on November 27. "Two million consumers interacted all on Facebook. There were millions of interactions we had to capture."
Enabling the workforce
People are questioning IT as they have superior hardware and software at home. As Frantz points out: "I sit at home with my incredibly thin MacBook Air and iPhone, then at the office, I open up the IBM, HP or whoever's laptop is secure, it's slow. Why can't we get the same at work as we get at home?"
While there is a lot to think through with using personal technology in terms of data privacy, Diageo is providing applications and connectivity to give any employee access to e-mail. But he says: "We won't support the device."
Nevertheless, Franz recognises the value of supporting end users, even when budgets are constrained. He says, "The happiness of an employee is linked to the technology they use. You need to provide a seamless environment so that people feel they can do their job. It does require investment, but this needs to be balanced this with employee satisfaction."
Brian Franz's advice on strong IT leadership
1. Get the basics right
2. Be the business
3. Execute brilliantly to build credibility
4. Ruthlessly focus on delivering tangible outcomes
5. Ensure it has a solid ROI
6. Be bold - you deserve a seat at the table