Industrial packaging company Greif Inc. estimates it is currently saving $1 million in IT costs since consolidating on a single platform. The firm recently underwent an IT consolidation strategy using SSA Global technology and the IBM Corp. i5 eServer hardware platform.
According to Ken Andre, CIO at Greif, the company recently made some acquisitions and had been struggling to consolidate a disparate IT infrastructure. Overall, the IT consolidation is a component of a larger business transformation strategy to improve customer support and services. It’s all about agility, Andre said.
Greif, with the help of SSA Global and IBM, is working to consolidate its data centres. The major task was to merge its two SSA Global enterprise resource planning (ERP) systems on a single iSeries i5 platform using both i5/OS and AIX to produce a leaner infrastructure, Andre said, adding that the goal was to reduce IT cost and complexity.
Greif purchased the IBM eServer i5 system through Sirius, an IBM Premier Business Partner and SSA Global Strategic Alliance Partner. According to Graeme Cooksley, executive vice-president of SSA Global, IT now competes with other parts of the business for the investment dollar within the organization. “From a technology perspective you can now run different applications using more than one operating system on the same box…something larger global data centres couldn’t have done just a few years ago.” IT consolidation provides a more efficient IT infrastructure, and also brings business value with ROI that can exceed other business units, Cooksley claimed.
Based in Delaware, Ohio, Greif has 10 Canadian operations including a processing centre in Niagara Falls. The goal was to consolidate to fewer data centre facilities with fewer servers. Greif’s leases for its Hewlett-Packard Co. Unix and EMC hardware came up at the end of 2004.
The company was actively seeking a replacement and saw the IBM iSeries Power 5 as an opportunity to consolidate and more than just replace the four HP servers, Andre said. The technology allowed Greif to consolidate up to 20 servers including older iSeries and some Intel-based Microsoft Corp. Windows servers. “We decided to do it after looking at the projected cost savings and improved reliability on that single platform,” Andre said. But it was far from an easy task as Greif had to reconcile the disparate legacy applications. “It was like trying to bring together two diverse religions,” Andre said.
Greif is adopting a best-of-suite approach — using SSA ERP solutions for its IT environment and has identified SSA Supply Chain Management, SSA Customer Relationship Management and SSA eBusiness solutions. Even though Greif initially started big — leases were coming up and the firm was experiencing reliability issues — Andre advocates starting small when thinking of IT consolidation.
“We decided to start with the biggest piece and that was migrating our 1,000 BAAN users in Canada and the U.S. over to the Power 5,” Andre said. Greif needed to look into the data centre and figure how to consolidate and save on infrastructure so that the one per cent currently spent on IT could be spent more on supporting users and applications, instead of just the boxes that run everything, Andre said.
Overall, the company saved 40 per cent in the pure infrastructure support costs for these servers, including the combination of the leases, hardware and software maintenance, operating systems and disaster recovery services, Andre said. Greif additionally saved by consolidating BAAN and BPCS ERP contracts with SSA after SSA bought BAAN. The cost savings allow Greif to reinvest in applications like CRM, lean manufacturing and scheduling from the shop floor.
This couldn’t have been done on a decentralized platform, Andre said, adding, “We can put them in without a big blip in our spending.” The biggest pain points were in dealing with past experiences of deploying large ERP implementations. There was reluctance to start such a large upgrade project since there were concerns over integration and current functionality. Greif learned that it had to link IT to the overall business strategy.
“Don’t look at it as simply buying hardware,” Andre said. In short, the IT department has had to adapt. “They have to become more generalists…IT must be broader in scope,” Andre said.