Private Cloud Supports Global Expansion at GraceKennedy Ltd.

By Rizal Ahmed, Chief Research Officer, SAPinsider

At a Glance

• GraceKennedy Limited, a Jamaican-based food distribution and financial services company, moves to private cloud in less than seven months.
• Evolving strategy at GraceKennedy includes expanding geographically and further diversifying its product and service offerings.
• Private cloud affords GraceKennedy 99.9% uptime and improved business continuity.

When GraceKennedy Limited needed to upgrade its infrastructure to support its international expansion and increase its performance and reliability, it turned to the private cloud. The results have delivered significant value to the business and freed its IT personnel to work on higher-level tasks that provide greater impact.

SAPinsider recently sat down with Deidre Cousins, CIO, GraceKennedy Limited, to further understand her decision to move to the cloud and what lessons she learned along the way.

GraceKennedy Limited is an almost century-old food distribution and financial services company based in Jamaica. Historically, GraceKennedy has focused on the processing and distribution of Jamaican and other multi-cultural food products in Jamaica and overseas markets. GraceKennedy operates six manufacturing facilities in Jamaica and its foods businesses also provide food distribution services to over 40 countries. GraceKennedy has established subsidiaries in Canada, Belize, the United States, and the United Kingdom. Its Financial Services Division includes commercial banking, general and health insurance, insurance brokerage, and investment banking, as well as remittance, money exchange and payment services businesses. Its Financial Services subsidiaries currently operate within the English-speaking Caribbean.

Evolving its SAP Landscape

GraceKennedy is a true-blue SAP shop and leverages SAP ECC to support its core business processes that include order to cash and procure to pay. “The SAP environment runs our business end to end. We use all the core modules to support sales and distribution and getting orders in, right through the value chain including Production Planning, Materials Management, Manufacturing and Finance and Accounting,” reports Cousins.

Looking ahead, GraceKennedy plans to expand geographically and further diversify its product and service offerings. However, Cousins and her leadership team felt that their previous infrastructure was holding back the organization’s ability to grow and provide adequate performance and support for the business as it evolved its strategy.

Given the company’s strategy to regularly refresh hardware, the decision was made to migrate some of the existing hardware and infrastructure to the cloud. Cousins and her team also felt that locating much of its data center in one geographic location left the business more vulnerable to unplanned outages.

“We need to grow at a faster pace and as we expand into other markets, we want to ensure that our SAP and backend is available and scalable to grow and provide services in those regions. That’s what prompted us to look at our entire infrastructure. We really had to take a step back and look at everything. For example, we realized that having a centralized hub in the Caribbean, we were susceptible to some of the risks as it relates to natural disasters and if there was an outage, it would impact our international locations. We had to look at business continuity as a priority and how we could construct our landscape to build in more redundancy. That was the key,” Cousins says.

Landing in the Private Cloud

Cousins and her team started to aggressively explore various cloud options and ended up focusing more on private cloud. Security and control were among the top drivers influencing Cousins and her team’s final decision. They also felt it would put them in a strong position to support their eventual migration to SAP S/4HANA.

“We went with Infrastructure-as-a-Service and the private cloud. Our emphasis was on security and data protection. We wanted to ensure that the data being transmitted back and forth would have the right controls and encryption and be able to monitor security enterprise wide. We felt private cloud would better support compliance in our expanded geographies and fit our disaster recovery and business continuity requirements,” Cousins says.

GraceKennedy chose Virtustream, a Dell owned company, as their cloud provider for a couple reasons. GraceKennedy runs Dell infrastructure and hardware and the service provider had some previous experience with Dell products. GraceKennedy also felt that Virtustream’s expertise with SAP and similar infrastructure was an advantage. According to Cousins they have been very happy and satisfied with the relationship and the results thus far.

Lessons Learned from GraceKennedy’s Cloud Project

In the end, GraceKennedy’s cloud migration project lasted over six months. This involved moving its entire production back-end including servers, storage, and interfaces over to the private cloud. Because there are so many variables involved that could potentially impact their core business, detailed and intensive planning was key to success.

One of the most important factors according to Cousins was getting GraceKennedy’s businesses involved early even though many would classify this move as primarily an IT project. “For such a major project like this migration, there’s no turning back. If there’s anything that can potentially negatively impact the business, we need to know that. And the only way to do that is to get the business involved. It’s their data, their applications. They know how they should perform and can tell you when it’s wrong,” Cousins says.

Other key issues related to testing and ensuring that interfaces between core SAP ECC and third-party applications would work in the new environment. GraceKennedy supported a number of key interfaces that connected business-critical non-SAP applications. “This support required a lot of coordination with vendors that supported our third-party applications,” Cousins says.

GraceKennedy’s legacy infrastructure needed to be updated — including applications, drivers, and other solutions — so that they would be compatible with the latest hardware on the Virtustream private cloud. This is where some of the unexpected time was spent during the project.

“In order to go to the fresh environment and move data over, we had to do a lot of work to bring our existing environment into compatibility status with Dell’s infrastructure. This meant doing the necessary upgrades and patches on the operating system and database level just to meet minimum requirements.  We experienced some delays here because we didn’t realize the magnitude of work that was required,” Cousins says.

Providing an adequate amount of bandwidth to move massive amounts of data to their new private cloud was another important lesson learned. GraceKennedy had to work with its telecommunications provider to scale up significantly, doubling its previous bandwidth to support the migration. This wasn’t a long-term investment according to Cousins and they were able to bring down that outlay once the project was complete. “We just couldn’t afford to have any form of disruption to our business. This was a very high-risk project,” Cousins says.

Getting to Real Results

GraceKennedy experienced many important benefits once the project was complete. Some of these results extended beyond just support of the business but further empowered the existing employees. As much of the core day-to-day BASIS and administrative tasks were pushed to Virtustream, GraceKennedy’s IT employees are now freed up to work on higher-level tasks and focus on strategic initiatives that deliver more value to the business. This has been an outcome that has not only improved performance but delivered greater job satisfaction to the existing staff.

“When you look at members of the IT team and their capabilities and skillsets, there’s so much that we can now tap into rather than having them sit behind a desk working on system maintenance and support. That hour or two of time every day that they spent just trying to keep things going can now be focused on quality assurance and being a true partner to the business,” Cousins reports.

At the same time there have been very tangible performance and uptime related benefits from the move to the private cloud. Many of these results were seen almost immediately. “User satisfaction really went up. When we made this transition system performance improved significantly. The turn-around time of processing certain transactions improved by at minimum fifty percent, depending on the process. Users were quite impressed,” Cousins says.

GraceKennedy also saw uptime and availability increase to at least 99.9%, almost hitting the hundred percent mark. This helped to remove that risk factor from the IT team’s priorities. “This move has given us more comfort in terms of availability and business continuity. We now have a resilient infrastructure that allows us to manage at 99.9% uptime,” Cousins says.

Additionally, Cousins and her team no longer have to evaluate and plan for major infrastructure investments because with the cloud, these outlays shift from capital to operating expenditures. Now, they can focus on the next step of evaluating the move to SAP S/4HANA and improving and standardizing their business processes.

What this Means for SAPinsider Executives

A move to the cloud carries with it tremendous potential but also requires preparation and diligence to make it work. Here are some additional lessons and considerations for executives as you plan your own journey to the cloud.

Understand and plan for the interdependencies. When you move to new infrastructure there are a host of relationships and pre-requisites that your project teams need to consider. This requires significant planning and testing. Make sure that you are budgeting for the unknown and have extra time to explore potential impacts of the move and surprises that you may encounter along the way.

Build a post migration strategy for staff and skills. Many of the critical tasks that your staff completes today on a daily basis may no longer be necessary or can be handed off to your cloud providers. This frees up your staff to do strategic work, but don’t wait for the migration to plan for this. Inventory your current staff’s skillsets and passions so that you have a plan for leveraging them after your transition to the cloud.

Know that technical migrations still need business acumen and insight. One of the tendencies for technical migrations is to involve the business in the final stages and testing. According to Cousins this can be a recipe for disaster. It’s the business people who know what the transactions and process should look like and how they need to perform. Without this insight you will be flying blind. Get the business involved in any migration project right from the beginning.

Prepare for a different type of management. You should not remove yourself from management responsibilities once certain tasks and processes get handed off to your provider. It’s important to have defined KPIs and data that you require to review and set those expectations clearly with your partner. For many that means studying up on service-level agreements and establishing important communication protocols.

Company snapshot 

• Headquarters: Kingston, Jamaica 

• Industry: Food Trading and Financial Services 
• Employees: 2,000 
• Revenue: Revenues totaling $115.4 billion (~US$769 million) were realized by the Group in 2020 
• Company details: GraceKennedy (GK) was founded in 1922 and over the years has expanded and diversified into a formidable network of 50 subsidiaries and associated companies which operate in the areas of food trading and financial services. GK’s operations span Jamaica, several other Caribbean islands, North and Central America, the United Kingdom, and several European countries.  
• SAP Solutions: Core SAP ECC including Sales and Distribution, Materials Management, Production Planning, and Finance and Accounting