JCB is an iconic British brand. Ask any British child to draw a picture of a ‘digger’ and they will conjure up a sketch of a bright yellow piece of JCB earthmoving kit. But this distinctly British family company is global and is expanding fast in Brazil. IT Decisions caught up with their Brazil technology head, Fabio Kruse, to ask about his plans and challenges here.
JCB was founded in Britain by JC Bamford in 1945. The firm has expanded to now supply over 300 different types of machine to over 150 different countries. Though ‘JCB’ is actually a trademark, the term is widely used to refer to any mechanical digger or earthmover and even features in the Oxford English dictionary.
The company has found particular success in Brazil and is expanding to a new, much larger, factory in 2012. Chief information officer (CIO) Fabio Kruse explains: ”We are moving to a new factory, which is already being built. The IT plan for the new factory is about 90% ready now. I am managing ERP [SAP], communications, telephony and all the systems. At present we have quite a small team, but I expect we will grow as these new systems are implemented at the new site.”
As is the case with many CIOs, an enterprise resource planning (ERP) implentation has been the focus for Kruse over the past couple of years.
“It took months of planning for the migration because we had to be really careful to get it right. Now, our new focus is the opening of the factory – we are aiming for April 1st, 2012, but this could still change. We implemented our own local version of SAP here in Brazil because even though there is a global ERP structure for the compnay we had a lot of local requirements, and the culture of the company allows us to deal with this,” the CIO said.
“There is still central management from the UK head office, but the different countries are able to implement their own systems locally,” he added.
Kruse explained how he had hired local consultants to help out with the SAP implementation in Brazil despite the firm already using Logica for similar work back in the head office.
“It is more do with the supplier understanding Brazilian laws and how the supplier deals with the sales process. Sometimes all this local complexity means that a local company can really understand this better. I am not saying that a big international company cannot understand Brazil – many of them have local offices so of course it is possible,” Kruse said.
Technology underpins new factory
The new factory is being designed using a technology framework led by Kruse.
“We have the concept of technology throughout the organisation, with guidelines for telephony, cabling, and everything. We specified that every device must be IP-enabled, such as door access controls or CCTV cameras so there is a framework ensuring everything can be interconnected,” he explains.
Kruse has taken an interesting approach to purchasing systems for the new factory, insisting on solutions from his suppliers rather than just individual pieces of equipment.
“We need to not only provide the equipment for telephony to our team, but also the servers and support, so when we go to suppliers we need complete solutions such as the server, software, and support all packaged together,” he said.
“By going for a solution-led model we can ensure that if there is a problem anywhere in that system we can call on just a single supplier to fix the issue rather than trying to determine where there is a problem and who is responsible,” Kruse added.
“It allows us to create a single point of contact for support within the organization that makes it much easier for people to get help.”
The CIO as a supplier ‘hostage’
The JCB approach to IT implies a great level of trust in suppliers, though. A CIO that buys equipment, connectivity, and support from a single supplier rather than just the equipment is far more beholden to that supplier than the CIO who buys from a range of companies. Kruse warns that the CIO always needs to be careful to not end up paying out money for services, but feeling like the supplier holds all the cards.
“You cannot ever be a hostage to your supplier – this does sometimes happen. You write a contract with them, you have an agreement for the work, but the client still feels like a hostage of the supplier. You bought something from them, but you don’t feel that you are getting any advantage – it can feel like the supplier is the only one with any advantage. There really must be a balance between the client and supplier.”
This is a classic problem of outsourcing, how to make a client and supplier relationship work when one company wants to get good value for the money they are spending and the supplier wants to ensure the scope for their work is as small as possible – creating a true partnership can be difficult because the objectives of both firms need to be aligned.
Kruse believes that both sides can only do well if they don’t believe that working together is a zero-sum game.
“I’ve felt this issue several times in the past. You need a good, truthful, relationship for it to work. Suppliers need to win – of course – but the client also has to win. We need to think of both sides succeeding from a relationship, because if only one company wins then neither company will work in a very efficient way that helps the other,” he said.
Click here to listen to Fabio Kruse give an outline of the IT function at JCB Brasil
Click here to listen to Fabio Kruse talk about their recent SAP implementation
Click here to listen to Fabio Kruse explain his views on local v international IT suppliers
Click here to listen to Fabio Kruse explain the IT complexity at the new JCB factory
Click here to listen to Fabio Kruse talk about why he feels clients are sometimes held hostage by suppliers
Photo by Andrew Stawarz licensed under Creative Commons