Veyance Technologies, the exclusive manufacturer of Goodyear Engineered Products, has ditched its traditional outsourcing relationship with IBM after it failed to perform to acceptable service levels, and is in the process of moving its SAP applications to infrastructure-as-a-service (IaaS) provider Virtustream.
Computerworld UK spoke to Veyance's CIO, John Hill, who was brought into the company a year ago to drive the use of IT as a competitive advantage for the business and to help ensure a healthy return for its private equity investors.
The five year contract with IBM was Hill's first port of call.
"The contract was scheduled to expire in February 2013 and so I launched a competitive process for an IaaS provider to host our global SAP instance, which is what we use to run our business on a 24x7 basis - everything from manufacturing, distribution, to financials," said Hill.
"There were problems with availability and reliability. IBM wasn't even close to providing the standards we needed as a business, especially in terms of flexibility and speed when provisioning capacity or test and development environments."
He added: "It wasn't anywhere near as fast as it needed to be."
Hill explained that there had been times when Veyance had ordered new servers, which he believed, with an acceptable response time, should have been available within three or four weeks. However, IBM sometimes took up to ten weeks to provision the servers.
He said: "Having to wade through extended procurement and provisioning cycles in the IBM relationship was a real drain on value for the business.
"In an IaaS environment you should be able to provision capacity on demand, within a day or so."
Veyance awarded the contract to Virtustream in July of this year, where it is in the process of migrating its systems (SAP R/3, SAP XI, TREX, Netweaver, ITS and WAS) to its xStream cloud platform.
Hill also believes that the IaaS platform will provide better reliability and backup controls when compared to the set-up it had with IBM.
He said: "We were also lacking in effective disaster recovery. We had some outages with IBM that were very costly and very painful. With Virtustream we have a service level agreement that provides a full recovery of the production environment in an alternate data centre in under an hour."
"When you are running a global business that is tied to that one system, it is very costly to have an outage. In the cloud we can include disaster recovery and data replication as inherent features."
Veyance has already moved its test and development systems to Virtustream and is scheduled to move the production system over in January.
Hill told Computerworld UK that he expects to save approximately 30 percent by migrating to the cloud, which equates to "millions of dollars". He said these will either go back into the bottom line or be reinvested in talent.
However, the infrastructure is only part of Hill's plan to transform Veyance's technology set-up. He also has plans for both the network layer and the application layer.
Veyance currently has an agreement with AT&T to provide it with a traditional MPLS network. This is currently being revised so that the network architecture is 'more cloud facing'.
Hill said: "We want to complement our MPLS with very strong direct Internet circuits that are load balanced in order to essentially provide a much more flexible and nimble network environment. We will also be going out to tender again for the global network too."
At the application layer, Hill has been migrating away from on-premise systems to a variety of 'wrap-around' software-as-a-service (SaaS) applications, which he believes will save the business between 20 and 30 percent in costs.
"Clearly we have SAP at the core, but as powerful as a traditional ERP is, it is also extremely slow. Wrapped around SAP I have been putting in an agility layer, which are SaaS applications that mostly have external facing capabilities - so facing customers, employees, vendors," said Hill.
"We have migrated our HR to Workday, which went live a few weeks ago. We have implemented Salesforce.com's sales and service clouds to support our CRM and customer service activities. We have implemented ServiceNow as our ITSM platform and migrated all of our messaging away from Lotus Notes to Microsoft 365," he added.
Hill believes having these applications around the SAP core will benefit from a lower cost of ownership, but also rapid upgrade cycles.
Veyance has also ensured that it manages to control its data to a certain degree by striking deals with the cloud providers, where they will be required to feed any Veyance data back into its traditional data warehouse infrastructure.
Hill said: "We are in the process of implementing a global data warehouse strategy, so essentially all the data from the various applications are brought together into a data warehouse, to ensure effective reporting, but also manage risk.
"You don't want to have all you data in your SaaS applications in jail somewhere. Our architecture allows all the data in the cloud to be replicated into our controlled environment. This also gives us the option to easily shift applications if we decide to at some point in the future."
He expects the entire project, both the IaaS migration and the adoption of SaaS applications, to be completed by the summer of 2013.