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Thought Leaders In Cloud Computing: Scott Martin, CIO Of Nonni’s Food Company (Part 3)

Posted on Friday, Oct 29th 2010

By Sramana Mitra and guest author Shaloo Shalini

Sramana: What is your strategy in terms of managing this manual piece? Is it something you are outsourcing or something you are off-shoring?

Scott: Right now, we are making it work manually with internal labor. As I said earlier, it is offsetting a lot of manual labor anyway. Some of the same people who are involved with that process internally are also involved in this process.

SM: Is the volume not so significant that you need a business process outsourcing strategy?

Scott: What was the need to do this? Is that what your question was?

Sramana: The volume of work, the volume of this kind of digitization work that you have, it is not significant enough to put a business process outsourcing strategy in the middle; you can deal with it with your internal resources, right?

Scott: Yes, I don’t think the exceptions in the process are unmanageable or require outsourcing. As I said earlier, we are doing a lot of work manually anyway.

Sramana: You said that you are doing something in sales management also, sales reporting on the cloud. Can you give us more details on that workload?

Scott: There is a reporting tool called Roambi that makes some nice reports and works for PDA devices, for example. It is a neat tool that I happened to see at a SAP conference in Orlando. All you have to do is feed some of your business data in these third-party applications. We can report through their reporting applications, and they have nice reports for handheld devices like the iPhone and the BlackBerry. There are other good reporting vendors out there, like IRM Corporation. We use quite a few tools from them.

Sramana: What is it that Roambi and IRM Corporation do in terms of reporting that vendors like SAP don’t? They are the ones who actually have this business data, and that is where you are storing the business data. Your ERP vendor is SAP, right?

Scott: It is a long story, but we are in the process of moving to SAP. Nevertheless, many of the reporting tools are from companies that are the best in the world. There are other companies out there that design software specifically for your industry and segment needs. I know that IRM and Roambi, for example,  are heavily involved in the consumer packaged goods (CPG) industry. They make tools that are specifically designed for people reporting for that industry, whereas something like SAP is designed for anybody who wants to run it in any company. What these other vendors do is focus their solutions on a specific industry, with some really good features out there such that they can meet our needs a bit better. They make some really nice suites of tools that we can use.

Sramana: Interesting! So there is a set of vendors that are vertical specific, CPG vertical specific, that you find useful. They are adding a vertical layer of domain knowledge on top of the horizontal ERP system. Right?

Scott: Correct. They seem to be meeting the needs a bit better, and I hear that from multiple people whenever you talk about SAP, [Oracle] BI Suite, and so on. There are complexities involved, and then there is trying to get the end user comfortable with using such complex tools after you have set up things. These are some of the considerations that make some of these third-party tools even more attractive for a CPG company like us.

Sramana: I see. The next question is, what are your observations in terms of business models in the cloud? How are these observations impacting your decisions and your IT strategy right now?

Scott: First of all, I have a really strong belief that companies have to focus on what really adds value to their business. A lot of typical IT things don’t make sense because they don’t add a competitive, visible advantage to the company. All they really do is provide a utility that just has to be there, like running e-mails, running backup, things like that.

If you work with a vendor that can take off those things for you, then you can focus on things that are critical to your business applications. Well, it is getting back to the question of what drives your company to have a competitive advantage over its competitors. I tried to get people in, get the third party in to manage the plumbing, as it were, and then I focus on what really is valuable to the company. Some of things may cost a bit more, but if you are not focusing on your internal labor on low-level activities, then you are focusing a lot on the business and your core functions.

Sramana: The discussion we just had about your document management strategies, there you saw that the cost structure of the cloud vendors was too high, and you brought the document management function into the private cloud. That obviously changed the business model, right?

Scott: Yes, it did.

SM: What I am trying to get at is, what do you think about this when you are looking at different workloads? We were talking about analytics such as sales reporting, and some of these vendors are doing CPG-specific reporting on top of SAP data. Is that something you would want to bring into your private cloud? Or is the business model such that it lends itself to leaving it in the public cloud?

Scott: I see. Well, it is really application specific. In the example of the CPG reporting, they don’t offer a private cloud option. It is hosted on their site. Some of the vendors are definitely taking that strategy where they have public hosted solutions. In some cases, it may make business sense to go with that vendor over another one that does offer a private cloud solution. In other cases, there is no private cloud offering and you just have to go with that vendor and their public hosted solution and accept any risk that come on with the public cloud. Most of these vendors are smart and realize the risks of the public cloud, so they are trying to get away from some of that by giving private cloud–based solutions. The private cloud is sometimes the only option that a vendor provides, and in our case based on our requirements, we went with it because of a business reason.

This segment is part 3 in the series : Thought Leaders In Cloud Computing: Scott Martin, CIO Of Nonni’s Food Company
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