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What do a global staffing agency and an international trader in fresh fruit have in common?
Not much, on the face of it.
But there’s one experience that Kelly Services (one of the world’s biggest staffing companies) and Capespan Continent (a global fruit trader) have in common.
It’s the experience of transforming their one-time fragmented global information and communications technology (ICT) infrastructure into a consolidated network.
Asked about the benefits of this consolidation, the folk at Kelly and Capespan talk about the three Cs: cost savings, consistency and coverage.
These advantages are perhaps most evident in the case of Kelly services, whose 2,000 branches across the world place more than 65,000 people in temporary jobs each week.
Given the spread of its operations, a cohesive network was an essential requirement – but one that until recently remained unfulfilled.
“We had 16 disparate organizations, 16 data centres, 16 and sets of infrastructure across diverse geographies,” recalled Jason Jennings, European IT director with Kelly Services.
He said, a decision was taken to consolidate all those data centres to a single location, and use the services of a single operator to manage relationships with all of Kelly’s regional and local network service providers.
Kelly essentially opted for what in industry parlance is referred to as a virtual network operator (VNO) model for constructing (or in this case reconstructing) its global ICT network.
The VNO it selected to accomplish this was London, U.K.-based Vanco Plc.
Vanco owns no infrastructure of its own, but designs and manages networks for more than 200 enterprise customers using underlying infrastructure from around 300 providers in 155 countries. Vanco says its knowledge of and relationship with such a broad range of providers, enable it to get the best prices for clients, and create network architectures using the most appropriate technology.
Typically, global enterprises opting for this model would leave choice of local or regional providers to the VNO.
However, Kelly Services wanted a more direct say in provider selection within many geographies. Sometimes there were business reasons for that choice. For instance, Jennings says, “in a lot of markets, our number one customer was the local telco.” (Other things being equal, passing business on to your largest customer isn’t the worst idea).
If a network services vendor selected for a particular region by Kelly Services wasn’t on Vanco’s list of certified providers – this happened in the case of Scandanavia, for instance – Vanco would get them through the certification process.
Flexibility and cost-savings were key objectives for Kelly – and the principal strategy for achieving them was a Vanco business tool dubbed Active Negotiating Process or ANP.
This describes a Vanco practice, of reviewing the prices of its local loop suppliers every year and shopping around for the lowest. Mid-contract, Vanco passes 80 per cent of the cost-savings to its customers, and by a profit-sharing arrangement keeps the rest.
Kelly’s initial project with Vanco encompassed 242 sites in 15 countries. From a technology perspective, the staffing firm moved from its former leased line infrastructure to Asymmetric Digital Subscriber Line (ADSL) that enables faster data transmission over copper telephone lines than a conventional voiceband modem can provide.
In addition to its data, the company will be shifting management of its voice networks – fixed line, mobile and PBX maintenance – to Vanco as well. “That’s 310 sites across 16 countries,” said Kelly. He said a European wide area network is well on its way to being completed.
Given the massive geographic footprint, and the range of services and technologies involved, Kelly said the flexibility the ANP program provides is vital. “If our relationship with [one of our] suppliers changes, ANP gives us the ability to replace that supplier.”
One of the most dramatic – and tangible – benefits from moving to the VNO model and Vanco has to do with the cost reductions. “From a voice perspective, we’ve achieved 20 per cent savings,” says Jennings. “A ‘voice minute’ now costs us 20 per cent less than it did six months ago.”
Across the entire contract, he said, Kelly has so far realized savings of $2.7 million per year. “We project this will increase during the remainder of the contract.”
One of the main reasons for the cost savings, he said, is the sharp reduction in Kelly’s supplier management overhead. “We had the potential for five suppliers in each market – that’s 80 suppliers in 16 countries. Now we have one supplier – Vanco – looking after all that.”
Capespan quest bears fruit
If the need to drive costs out of the network was important for Kelly, in the case of Capespan this was a business critical requirement.
A specialized world player in the marketing and trading of fresh fruit internationally, Capespan’s supplier base is mainly in the southern hemisphere, in countries such as South Africa, Chile, Brazil and New Zealand. The company acts as a category manager for supermarkets within Europe, trading 58 million cartons of fresh fruit a year. Worldwide it has 14 sales offices.
“Our market is driven by costs and service,” said Tom Quets, IT manager at Capespan. The margins in this business are very tight, Quets explained, with a customer base mainly consisting of supermarkets, and supermarket chains. “[Timely] service is also vital, because it’s a [quickly changing] trading environment and everything you can’t sell today, you won’t be able to sell tomorrow.”
He said having constant availability of people and systems to support this environment is key.
Disparate groups of stakeholders needed to be linked to the global network, including Capespan’s sales offices, suppliers, and logistical service providers.
Quets said Vanco delivered on Capespan’s main requirements: cost effectiveness, high levels of service and flexibility and close attention to detail (with a willingness to understand the nuances of the business).
Capespan has been relying on the VNO model (with Vanco has the virtual provider) for around six years now.
In 2001, Vanco managed the company’s transition from a frame relay network that linked its many European sites to IP-VNP technology. This move, said Quets, provided a better cost to performance ratio across the entire network.
In the near future, Capespan will be migrating its core sites from IP-VPN to an MPLS infrastructure, Quets said.
Less critical services such as Internet browsing, mail replication will be routed through the IP-VPN, which is being retained as a secondary network, said Quets. “Services that need a high quality of service – VoIP or critical protocols such as Citrix – will be put through the MPLS.”
MPLS will also provide the backbone for Capespan’s video over IP communication system. Currently the company routes video through ISDN.
The overall architecture will be so designed as to allow eac