Managed network services mean that Chivas can toast future success
When Pernod Ricard and Diageo jointly acquired Seagram’s wines and spirits business in 2001, included in the purchase was Chivas Brothers, one of the world’s best-known whisky makers. With headquarters in Paisley near Glasgow, and employing more than 800 people, Chivas produces a number of prestigious whisky brands including Chivas Regal, the Glenlivet and Royal Salute.
Following the acquisition, Pernod Ricard and Diageo split Seagram’s business between them. Chivas, including its manufacturing and bottling facilities in Scotland, went to Pernod Ricard – one of the world’s top three wine and spirits companies with sales of €3.5bn (£2.4bn) in 2003.
But when ownership of Chivas changed, the whisky maker urgently needed a new data network to connect multiple sites – from rural distilleries in the Highlands of Scotland to export offices in London. A modern, flexible, cost-effective solution was sought that could be implemented without disrupting business.
Rather than subsume its new whisky-making subsidiary into its global operations, Pernod Ricard sensibly gave Chivas a degree of autonomy in managing its own affairs. The group firmly believes that having a decentralised organisation differentiates it from the competition and is one of the keys to its success.
For Chivas, being a separate entity again as opposed to part of a wider business had repercussions that had to be addressed without delay. Among the most important was the selection and implementation of new communications networks. While Chivas does not operate 24 hours a day, seven days a week, having a robust data network is still crucial to its business. Some 800 employees rely on access to the data network to perform their daily jobs.
Also, being a whisky producer, Chivas is required by Customs & Excise to track its products from the distillery, through bottling to distribution.
Chivas had already used traditional BT voice and data networks: FeatureNet 5000 for voice, and a fixed-link network based on point-to-point KiloStream circuits for data. The latter, while functional, was a distance-based charging regime and therefore not the most cost-effective solution for a distributed company like Chivas – which is based in Scotland but has heavy data traffic to and from its international offices in London.
Under its new owner, Chivas wanted a flexible, expandable, reliable and less expensive network solution that would be based on proven technology. Above all it wanted a solution that could be installed quickly – in about three months – and painlessly. “Our number one priority was to completely avoid business disruption,” says Stuart Watson, Chivas’s IT director.
Several bids were considered and Chivas eventually opted for a single supplier – BT – to help it implement its communications strategy. Initially the focus of that strategy was on getting a data network up and running, but in later phases a converged voice and data IP network would be implemented. Chivas chose BT’s IP Clear service, an IP virtual private network (VPN) running over BT's wholly owned IP multi-protocol label switching network.
Watson explains, “Part of the rationale for selecting IP Clear was that sometime in the future we knew we would converge voice and data across one network, and today the only way to do this is with IP.”
As well as the IP technology, Chivas wanted a service provider with demonstrable project management skills to meet its tight deadlines.
In just three months, BT installed the data network linking Chivas’s 21 sites each with varying bandwidths so that they could share vital data – including the main manufacturing and financial applications – as well as e-mail and internet access. Sites include rural distilleries in the Highlands, bottling facilities in Paisley, a major distribution centre in Linwood, and administrative offices in both Paisley and London.
Despite some concerns about the impact of the notoriously difficult task of switching over its data networks, no major problems were encountered. “The changeover to the IP network was well run and well managed,” says Watson. “We had practically no disruption to business at any of our sites, and the project came in on time, on budget, and exactly to our expectations.”
Under the terms of the five-year contract, BT is also fully managing Chivas’s data network. Watson says, “We chose a fully managed option because BT was offering a good, flexible service at a cost-effective price, and I didn’t want to tie up one or two of my MIS staff constantly monitoring the data network. It really isn’t part of our core function.”
Included in the managed service is proactive network monitoring and fault handling, the aim of which is to identify and correct faults remotely before they affect Chivas’s network service. If the faults cannot be fixed remotely, BT engineers, including staff located right in the Scottish Highlands, can be quickly despatched to any of Chivas’s sites.
An IP Clear service manager has regular review meetings with Chivas to discuss service delivery, any Chivas concerns and actions that may be needed. Chivas also receives network performance data and management statistics so that it can see how its network is functioning. These monthly reports include information on the data network’s peaks and troughs, and which sites are running near capacity, enabling Chivas to make better-informed decisions about changes to its network.
One of the biggest benefits to Chivas of an IP network is that it provides the company with a flexible and assured way forward. Not only can Chivas easily change bandwidth and add more users but it can also implement its forward strategy to integrate voice and data networks into a single IP network. Chivas has already installed IP-ready voice solutions and expects network convergence in early 2005.
So now Chivas has a more flexible and cost-effective network and the reliability that its business demands. “We’re saving up to 20% against the arrangements that we had previously, and our internal key performance indicators show that network availability has improved from 98.5% to 99.9% since we took the managed IP solution,” says Watson.
Not only can the company match bandwidth requirements to business need on a per-site basis much more closely than before – saving money on overcapacity – but it can also readily adjust bandwidth to each site as required.
By going for a managed service, Chivas has an up-to-date data network that is something to raise a glass to.