Brian Franz has transformed Diageo's information services in a little over six months as part of a successful multimillion-pound cost reduction. The objective now is sustainable, year-on-year productivity on the same cost base, keeping run costs low to reinvest in business growth.
Chief information officer and head of global business shared services, Diageo.
When did you start your current role?
What is your reporting line?
I report to the chief financial officer of Diageo.
Do you meet with and discuss business strategy with the CEO every week?
I have formal diarised meetings with the CFO and CEO throughout the year to discuss business strategy. In practice, the Diageo culture is one of regular dialogue and collaboration, which results in our talking more regularly and more informally.
Are you a member of the board of directors?
What other executive boards do you sit on?
The monthly 21 market managing directors forum.
Does your organisation have a CDO?
No, but in recognition of the importance of digital to our business we have a created a global digital director role within the IT organisation to work with commercial and marketing teams to increase engagement with our consumers through the design and delivery of innovative solutions.
What non-technology responsibilities do you have in the organisation?
I am responsible for Diageo’s business services, a global, financial shared services operation, providing a wide range of back-office services from general accounting, financial planning and reporting to specialist areas such as tax and treasury across 52 countries.
Business services plays a growing role in driving efficiency and standardisation in our back-office processes, together with our single, global SAP platform, delivering market coverage in excess of 85% of net sales.
The shared services model is now an integral part of Diageo’s finance function and operating model. It consists of both in-house (captive) services and external (outsourced) services in a global network with centres in Budapest, Bogota, Nairobi and Manila.
How many employees does your organisation have?
In Diageo there are around 36,000 employees globally. In my organisation, which is known as Global Diageo Business Services (GDBS) there are about 1,500 employees.
Does your organisation carry out significant trade in the EU?
How many users does your department supply services to?
Around 36,000 users globally.
How do you ensure that you have a good understanding of your business and how your customers use your business's products?
I meet with the CEO and the Diageo executive team on a regular basis and I am actively involved in the development of the Diageo business strategy. I ensure that all IT/shared service functions are focused on the customer; I see no reason why they should be viewed separately from the business strategy.
My organisation, GDBS, provides Diageo with the technology, tools and back-office support that allows our people to do their jobs well. We work with Diageo's employees, customers and suppliers all over the world, and make it possible for our business to run 24 hours a day, 365 days a year.
By aligning our strategy to that of the business – taking a customer-centric approach, we are taking a leadership role in driving significant transformation across the company. We are often in a unique position to view and deliver change across the business and this has helped to enhance our relationship with the business, cementing our role as invaluable business partners.
To help our markets sell, we have delivered best-in-class salesforce automation tools, distributor management solutions, trade promotion and supply chain management solutions. We are investing in data analytics for brand/trade and pricing insights. We are leveraging our regional shared service footprint for insight analytics, trade, brand and consumer data integration and dissemination.
Diageo technology strategy and agenda
Is your organisation being disrupted by the internet, mobility or technology-oriented start-ups?
Are you empowered by your organisation to disrupt from the inside?
Describe a disruptive measure you’ve led or played a major part in
We have established a platform, unique to the consumer packaged goods industry, to help us quickly deliver new digital assets to reach our consumers in a compliant and secure manner.
Our cost-effective, scalable and secure digital marketing platform, live in January 2015, was designed in partnership with Diageo’s agencies, offering a game-changing combination of Amazon cloud technology, flexible support options and resources to build and deliver digital projects for Diageo, from global websites to short-term branded competition apps and even internal facing URLs.
What major transformation project has been recently completed, or is underway at your organisation?
A key part of our strategy is to deliver sustainable, year-on-year productivity on our cost base, by keeping our run costs low to reinvest in business growth. In line with our objective to deliver top-quartile service and cost performance, we benchmark both our IS and business services with external companies such as ISG, Gartner and Hackett, to compare ourselves to both world-best (top quartile across all industry sectors) and our TSR group.
As a result of recent benchmarking of our IS services, we recently completed a programme to transform our IS service model to deliver a multimillion-pound run-cost reduction.
In a little over six months, we successfully transformed our information services, transitioning to a new infrastructure and service desk vendor Tata Consultancy Services, driving an unprecedented level of technical change that was high risk in nature, requiring global coordination to ensure we achieve our full savings commitment with minimal service interruption.
What impact will the above transformation have on your organisation?
We delivered significant IS cost savings to our business; migrated datacentres with minimal business interruption, leveraging 90% virtualisation to deliver a cost-effective, flexible infrastructure, with improved disaster recovery capability; implemented a new first-call resolution service desk for full end-to-end issue resolution; moved our email environment into the cloud to drive business continuity; updated our structure and vendor management process to operate a new integrated service model for enterprise-wide visibility and coordinated service delivery.
How has your leadership style contributed to the outcomes of the transformation project?
Our IS transformation was driven by challenging the status quo and setting and achieving breakthrough goals that drive extraordinary business results.
At the onset of the project, our breakthrough goal was to achieve around a quarter of the total cost savings required by Diageo, while keeping employee satisfaction high with our services, and delivering these results by the end of our fiscal year (a little over six months).
By reaching for goals that seem audacious, my team often achieves the impossible and delivers breakthrough performance for Diageo. I look to motivate my team in taking a leadership role in driving innovation and change across our business.
IS transformation was completed in just over six months with minimal business disruption. The project was executed flawlessly, with teams working tirelessly in partnership with TCS to ensure delivery of our cost savings targets.
What key technologies do you consider enable transformation?
• Software as a service in the commercial space
• Platform and infrastructure as a service – datacentres, servers and applications
• Amazon Web Services to host our digital assets
• API management – to drive enterprise integration, provide high visibility of existing services, flexible and scalable architecture and simplified connectivity
• Microsoft SharePoint/Office 365 – increased collaboration and knowledge sharing across 36,000 employees
• Mobility – increased access to information through virtualisation, agnostic of device, to increase employee productivity
• Immersive communications technologies such as Lync and Cisco telepresence to connect our workforce globally through any device
• Mobile applications – completing expense and other workflow activity through mobile devices
• Crowdsourcing – use mobile to drive merchandising and ideation
• Engaging with our consumers through our digital channels – ie vouchering technology that provides our consumers with incentives, increasing occasions to sell our products
• Big data – using multiple sources of structured and unstructured data to predict consumer behaviour
Are you increasing the number of cloud applications or infrastructure in use at your organisation?
What is your information and data analytics vision for the organisation?
Our vision is to deliver innovative analytics solutions, differentiated offerings based on market need while establishing the infrastructure and new capability in data to drive insight.
Our organisation will need to gain strategic and tactical insights from a rapidly expanding set of global, regional and local data sources. We are creating analytics services to streamline each market’s ability to develop the innovative analytics solutions they will need to win. These analytics services include the platforms, frameworks, design standards and methodologies that leverage best practices across markets, reduce development time and minimise cost. Central to this new architecture is a differentiated set of offerings that can be matched to individual market needs:
• Advanced analytics – high-volume, high-speed analytics (ie business performance) to understand company performance at any time, and respond to changing dynamics to make business decisions
• Core business intelligence – helping regions/markets to mine third-party data, specific to local needs
• Managing large data sets – such as consumer data, to help markets analyse and gain insights, assist marketing in measuring impact of marketing efforts, while responding to changing consumer behaviour
How is mobile and social networking impacting operations and customer experience?
Our customers and consumers want personalised services at any time and anywhere via their preferred communication channels. Diageo’s Connect web order portal allows our distributors and direct customers to order Diageo products. Through Connect, we can transact, engage and collaborate with customers and provide an exceptional customer experience.
With best-in-class technology, we deliver a differentiated experience for our customers through personalised content, products, account and shipping options. The self-service order placement drives touch-less back-office processing and built-in shipping logic, driving enhanced internal operational efficiencies and reduced time to payment for Diageo.
Connect allows our customers to enter orders online at any time of day from their own personalised product listing. These are automatically transmitted to SAP in real time for processing and stock checks. Customers can view order and billing, and check their payment status and delivery options.
Describe your strategic vision towards shadow IT and BYOD. How do you influence and engage executives and employees around choice?
We have been providing our workforce with innovative technologies to enhance productivity and improve overall business efficiency. Today’s workforce needs to access and share information at the point of activity, and we are providing easy access to Diageo systems and information through virtualisation technology, giving greater mobility and personal/corporate device choice (ie tablets, smartphones, personal laptops) as well as mobile versions of important applications.
To increase collaboration both internally and externally with customers, suppliers and distributors, we have launched Mosaic, to help employees easily collaborate on content and share information using social capabilities such as micro-blogging and community sites. We have recently expanded Mosaic to third parties and to mobile devices.
What strategic technology deals have been struck and with whom?
In 2014, Diageo appointed Tata Consultancy Services as its new global IT provider to manage Diageo’s global IT infrastructure, datacentres and servers, in addition to providing service desk support to employees. The appointment marked a significant step change in the way that IT would support our 36,000 employees around the world, giving them the freedom and agility to drive growth for Diageo in each of our markets.
Who are your main suppliers?
TCS, Verizon, Accenture, InfoSys, Microsoft, SAP, Salesforce.com, Workday, Concur, Microstrategy.
Diageo IT security and budget
Has your organisation detected a cyber intrusion in the last 12 months?
Has cyber-security risen up your management agenda?
Does your organisation understand the potential cyber-security threats it faces?
Has this led to an increase in your security budget?
How much is the IT operational spend compared to the revenue as a percentage?
What is the strategic aim of the CIO and IT operations for the next financial year?
Through a holistic approach to shared services, we aim to deliver significant productivity and efficiency improvements, a stronger control environment and business services that free our markets to focus on delivering Diageo’s ambition.
In the past 10 years, we have built substantial equity in an industry-leading single SAP platform, developed breadth and scale in shared services, and created commercial and supply chain process and systems capabilities, all providing a platform for sustainable growth. With this investment behind us, we are focused on our front office to enable growth, while driving continuous productivity and efficiency in our services.
Our focus includes:
• Delivering sustainable, year-on-year productivity on our cost base by keeping our run costs low to reinvest in business growth, while maintaining employee satisfaction at 80%
• Implementing front-office and commercial capabilities in support of our route to consumer
• Create next-generation digital marketing platforms to build relationships with our consumers, supporting the drive to digital commercial channels and driving improved collaboration with customers, distributors and suppliers
• Expand our shared services to deliver efficient processes and analytics as a service
• Deliver innovative analytics solutions and differentiated offerings based on market need while establishing the infrastructure and new capability in data to drive insight
Are you finding it difficult to recruit the talent you need to drive transformation?
Has recruitment and retention risen up your agenda as a CIO?
Diageo technology department
How would you describe your leadership style?
I see technology as a key driver of growth, transforming our organisation to align more strategically with the business, to streamline revenue-generating business processes and initiatives that enhance processes and relationships to sell, market and distribute our products.
I also believe strongly in:
• An extreme focus on agility and speed to execution – responsive to changing business needs
• Delivering systematic and sustainable process improvement
• Clear, measurable outcomes that drive business decisions
Explain how you’ve supported and developed your senior leadership team to support your overall objectives and vision
It is the culture of our organisation to grow our business and our people, giving them the freedom to do the best work of their careers.
I hold monthly senior leadership meetings and use these sessions to develop our vision.
I ensure that my leadership team operate with clear and measurable outcomes that are directly aligned to Diageo’s broader strategic vision.
We first align our longer-term strategy with Diageo’s ambition, and set clear, measurable multi-year targets that have been benchmarked externally.
This then forms our ‘annual performance promise’ – our commitment to achieving Diageo’s ambition, aligned with my leadership team and Diageo’s executive and cascaded to my entire organisation. All annual objectives flow from the performance promise to ensure every single member of my team is focused on delivering business outcomes that drive performance.
This feeds into our talent management process where we conduct annual talent reviews and succession planning, and create feedback mechanisms to grow and develop our people.
How many employees are in your IT team?
What is the split between in-house/outsourced staff?
Our contracts are outcome-based. We do not monitor in-house/outsourced split but manage third party arrangements through a focus on meeting and exceeding service levels agreed for our organisation.
Does your team include key skilled workers from the EU?