News Analysis

Tasty merger challenge sees Yummy benefits from IT

Adam Burns

Dickie Oliver, vice-president of global IT for Yum, the company behind KFC, Pizza Hut and Taco Bell, speaks to Adam Burns about how IT keeps the company cooking.

Yum was formed when food brands KFC, Pizza Hut and Taco Bell spun out of PepsiCo in 1998. At the time the three brands had all operated independently under PepsiCo's leadership.

"We had three of everything, three IT systems, we shared nothing," recalls Dickie Oliver. The new company had three of everything including payroll, ERP, financials, general ledger.

"For the first seven years, Yum focused on creating a single company. It was the right strategy for us at that time because we drove costs out of the organisation; we were able to get to a single technology platform in a lot of areas that we would not have been able to without that platform in place.

Brand take-over

However, in mid-2006, with a change in leadership, the company's strategy shifted focus to a more decentralised approach to management, where the brands took more responsibility. "We had a change in the executive structure, and the person who came in behind that was more of a facilitator, more decentralised, letting the brands execute and holding them accountable for that," he said.

Oliver did not want to see the pendulum swinging the other way, as the company had experienced the costs associated with a fully decentralised model. Instead, he said, "We've managed the slow migration of what makes sense to push back to the brands, the divisions for them to own, to allow them to be able to execute their business strategies and feel like they have accountability and ownership."

For IT, he says, "We push technology back into the brands then we allow the CIOs within those brands and divisions to work more closely with the business-side of the brands. We haven't cracked the code. We continue to be brought in late to technology initiatives or not be involved in discussions, but we're getting better at that."

To aid this, there are steering-committees throughout the organisations, some of which have committed more strongly than others to the overall vision for IT. In addition, he said, IT project managers are now managing business projects, since they have the right set of skills. "When we moved them into the business they were very valuable resources that helped them get projects done." This has helped to boost the credibility of IT as it moves forward to support the company's mixed centralised/decentralised approach to management.

"If you execute and execute at a high level, you tend to get asked back to the table. So, just continue to do those things, prove your value as a business partner and [senior managers] will continue to ask."

The business strategy means that some parts of Yum IT will remain centralised, to ensure that the company is able to continue to operate as a global entity. The part centralisation also helps keep the costs down. As Oliver said, "[It ensures] we're not overspending in areas that aren't critical to the ultimate business of making pizza, taco and chicken."

But, he concedes, "It's a balance and, at the end of the day, it is one that we continue to struggle through. I think, we'll evolve beyond where we are today." A key requirement moving forward will be strong executive presence combined with the ability for the business to adjust the centralised/decentralised balance accordingly based upon business needs.

Case notes

Yum employs a million employees globally. "There are a lot of ideas out there," said Oliver. "We shouldn't be reinventing the wheel every time we have a challenge come before us. Our business is not that complex. We sell chicken, we make pizzas and we make tacos. So at the end of the day we shouldn't have to figure that out multiple times the best way to do that and the best processes for driving our business."

The company has deployed a social network to help staff connect and share their ideas. he says, "If someone is solving a business problem of breakfast in Australia while someone, again, is trying to solve the [same problem] in the UK, how do they connect, share information, share solutions and share ideas."

This need for collaboration has led Yum to rollout an enterprise social networking platform dubbed iChing. Oliver said the platform allows people to share content, share ideas, ask questions, create groups of interests and then begin to socialize and innovate collectively.

Facebook-like user interface

With a generation of staff, the so-called "Millennials" starting to work, Oliver said iChing is helping to bring collaboration into the workplace in a way that will be familiar to Facebook users.

As the company expands into China, Yum is facilitating discussions between Yum China and an American company to support the roll-out of technology across 3,000 stores.

Oliver said the iChing platform is aiding these discussions, "One of my employees on the business side of architecture has spent the past two weeks in Shanghai facilitating that discussion. He has used our iChing environment to blog about it real-time during the meetings. So the remaining architecture organisation back in the States is able to engage real-time in that blog and answer technical questions that were coming up during the discussions."

This has meant that while only one individual needed to travel to China, Oliver had his entire architecture team on tap during the meetings.

Yum China, for instance, is currently trying to roll out technologies to its 3,000-plus company stores and has selected, or are in the process of selecting a firm out of Boston to supply that.

"So what you've got is Chinese business requirements talking to an American company and trying to facilitate that entire discussion, requirements, GAAP analysis, what have you," said Oliver. "So one of my employees on the business side of architecture has spent the past two weeks in Shanghai facilitating that discussion and being a part of that discussion."

Watch the video interview on MeettheBoss.tv >>


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