Del Monte-Shifting the IT Infrastructure to the Cloud
| Case Code: ITSY111 Case Length: 15 Pages Period: 2018-2019 Pub Date: 2020 Teaching Note: Available |
Price: Rs.500 Organization: Del Monte Foods Industry: Food & Beverage Countries: United States Themes: Management of Information Systems, Systems Design, Digital Strategy,Growth Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Need for Del Monte to Move to the Cloud
The US subsidiary of Del Monte accounted for around 75% of the overall group’s US$ 2.2 billion annual revenues. In the 2010s, Del Monte had been experiencing a slowdown in its various business categories. During the 2018 financial year, market pressures led to the closure of Del Monte’s two of its US plants. The plant closures were a part of the company’s ‘asset-light strategy’, which it had adopted several years prior. As part of that strategy, Del Monte had closed down several plants and shifted production to other plants. Moreover, the parent company of Del Monte pushed the US subsidiary to reduce its considerable debts, streamline its operations, and cut costs..
The Transformation Process at Del Monte
As part of its new strategy, Del Monte embarked on a mission to transform its IT infrastructure –including its core SAP ERP – and migrate to the public cloud, namely, AWS. The company decided against shifting to SAP’s cloud that could have meant an upgrade to S/4HANA , as it would have resulted in a significant increase in project costs..
The Benefits of Migration
Del Monte’s transition to the cloud was extremely smooth with its business users experiencing no delays, and IT support encountering minimal issues. Anderson said, “We looked at what the benefits would be, and it turned into an obvious choice for us to do it. The best compliment I got was when people said they didn’t even know we did anything.” ..
Road Ahead
Most industry analysts thought that as IT companies enhanced their cloud offerings, more organizations would make the shift to the cloud. Charles King, an Analyst at business technology service and consulting firm Pund-IT, said that cloud service providers such as AWS, Google, Microsoft, and IBM “have significantly enhanced the performance, capacity, quality and variety of the services their clouds support. As that evolution continues, we’re likely to see larger and larger organizations take fuller advantage of those clouds..
Exhibits
Exhibit I: Brands of Del Monte
Exhibit II: Important AWS Services
Exhibit III: Comparing Compound Annual Growth Rates (CAGRs) of Worldwide Public Cloud Service Revenue Segments, 2018-2022
Exhibit IV: SAP ERP Central Component
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