Often the sheer scale and age of an operation can result in dysfunctions that require an objective view and a different approach. This is how Ernst & Young Mexico came to overhaul the IT infrastructure of the world’s largest baking company.
Founded in 1945, Grupo Bimbo has expanded to operate more than 1,900 plants in 32 countries, including the United States, Canada, Russia, India, China and many in Europe. Its portfolio contains more than 13,000 products and more than 100 brands, including names such as New York Bakery Co and Sara Lee, and last year it saw annual sales worth $14.5bn (£11.2bn).
To give further idea of the scope of the business and its needs, its direct-distribution network consists of more than 58,000 distribution routes, spread across more than 1,800 sales centres and reaching more than 3m points of sale from large supermarket chains to corner shops. To support the business it relies on sophisticated information technology systems across its entire operation.
However, set against changing business demands the company felt its IT infrastructure was no longer supporting it sufficiently, so it began to look for new ways to service applications maintenance and support. It had an internal IT office of 60 staff, but much day-to-day work was outsourced to third-party suppliers for servers, computers, network and applications maintenance.
One of the chief concerns was that it was paying its supplier a set fee for ticketing incidents, but above that number there was an additional fee for every one. It was consistently paying above its fixed cost every month.
Another cost load was increased because it was paying for IT services in Mexico that it was generating around the world and could not deduct as tax.
Ernst & Young carried out a detailed assessment into the business over 12 weeks, talking to various operations to build a picture and identify problems. As a result of its conclusions, Grupo Bimbo retained it to carry out a complete overhaul using AXELOS’s IT services management framework ITIL to reconfigure its IT infrastructure.
The two-year operation was overseen by IT service management consultant Horacio Gutiérrez. “The aim was to change the way they were working by applying ITIL principles to their service model,” he says. “They were familiar with the idea of ITIL, but they didn’t understand it in depth and they needed the consultancy to be proficient in its concepts so they could align correctly with it going forward.”
Gutiérrez applied some key ITIL principles, specifically when it came to service, strategy, design and operation.
“If the computer broke they called a service provider, if there was a software issue they called on another and there was often disagreement between the two so they were losing time and money. We produced a concept of service coordination, which meant the service provider who owned the major portion of the agreement would be responsible and accountable for the resolution of issues regardless.”
Twenty Grupo Bimbo staff were trained and certified to ITIL Foundation level as the company geared to change its approach. Ultimately, this led to its appointing a new service provider, one of the key decisions in the process, a huge contract that had to work for both sides.
“One of the hardest things to find was the right service provider,” says Gutiérrez. “It wasn’t simply about expertise, they were all very experienced and reputable companies pitching. Our challenge was to evaluate the one that was best suited. Everyone is a master of Powerpoint but the reality is how committed were they to providing a daily service that fitted the company’s needs?”
Grupo Bimbo’s IT staff were initially sceptical about the switch, but that soon dissolved when they saw the potential benefits.
“They had been working with the same service providers for almost a decade,” he says. “They were concerned about replacing them because of their knowledge of the business, but in the end they were convinced it would work because the change was better orientated to their business needs.”
The change of service provider led to a huge reduction in one of the major sources of ticketing issues, which stemmed from staff using handheld delivery devices and synching them incorrectly.
“The new service provider separated incidents that were operational from those that were technical,” he says. There was better training for those operating the handheld devices and the number of tickets was reduced.
At the same time Grupo Bimbo was able to rationalise its operations over 32 countries. It now uses a single service application system that functions globally, but can also meet all territorial requirements such as legal and compliance regulations.
As a result of the reorganisation, customer satisfaction rose and cost savings of 26% were achieved, which exceeded targets. The company has increased its adoption of best practices, including proactive problem management and, as part of ITIL’s Continuous Service Improvement principles, Grupo Bimbo has also embarked upon adopting software as a service (SaaS) for its Enterprise Resource Planning and Business Intelligence platforms.
Last year, Grupo Bimbo received the ITIL experience award, collaborating for success, part of the internationally recognised professional services management awards.
“It was very satisfying for us at the time,” says Gutiérrez, “but for the client it felt like they were rewarded for the effort they had made for nearly three years, that all the conditions they had initially set had been met.”
To find out more about the most widely respected framework for service management, visit Built on ITIL
