CIO Ron Wells says he has a lot to be thankful for. This time a year ago, his employer of nine years, Carolina...
Turkeys, had just become Butterball LLC, taking the famous name of the brand it bought for $325 million in October 2006 from ConAgra Foods Inc. The combined business, which is based in Mount Olive, N.C., and owned by Goldsboro Milling Co. and Smithfield Foods Inc., expects to do more than $1.5 billion in revenue this year, for a 23% market share, Wells says.
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The newlyweds got through the holiday season and then the fun began -- bringing Butterball on to Carolina Turkeys' SAP system, itself only a year old. We'll let Wells talk turkey -- and discuss the latest with the Turkey Talk-Line.
Is the turkey business competitive?
Wells: It really is. You'd think with all the emphasis on eating healthier that this would be a growing market, but turkey consumption is relatively flat, so the competition remains fierce.
What kind of role does the CIO play at Butterball?
Wells: More and more it is a very strategic role. I'll give the Reader's Digest version of what we've been through over the last couple of years: We had a huge SAP project that went live two years ago this October. It went very well for us. We're running SAP for almost everything. One reason for that project was to help us grow. We took a look at the systems we had that were homegrown. They worked very well, but the company wanted more of a platform for growth. How prophetic. On the first anniversary of the SAP go-live, we became Butterball LLC.
We acquired Butterball, but we're smart enough to take that name. Our company had been on a mission to grow a name brand. That's very costly. After many years, if you get 20% name recognition you've done good. So, kind of overnight, we doubled in size.
How do you figure out what you're going to be selling?
Wells: There is a lot of forecasting involved. What made this year particularly interesting for us -- and we have a lot to be thankful for this year -- is that Butterball had no IT systems of its own. They were part of ConAgra. When we acquired them, we were paying ConAgra a service agreement to maintain those systems until we could cut the systems over. What our SAP system allowed us to do was to implement all the HR payroll pieces in three months, purchasing in four and the whole order-to-cash process in five months. You know, I wouldn't recommend it. It was a really, really aggressive schedule.
Our goal was to get solid before the holiday season -- so we're thrilled with the real good fill rates, good customer service. We've had no major problems through this holiday season on our systems. That's what we're most thankful for this Thanksgiving.
How did an IT staff of 25 get the implementation done so quickly?
Wells: We were very fortunate. As a company we made the decision not to customize, not go best of breed. Deloitte Consulting had assisted SAP with a food and beverage solution -- a pre-configuration of SAP. We were able to get several people that had been in Germany on that team that had developed it. They really understood the business well. The difference was tremendous [compared] with consultants who come in and we have to explain issues in the meat industry, like catch weight, freshness, product rotation. These guys came in, they already knew it: "Here's issues you're going to have; here's how we're going to work around it." It was just a very good implementation.
Does the company work directly with farmers -- do you go from farm to table?
Wells: That's another interesting difference between Carolina Turkeys and the Butterball business. Carolina is actually owned by the growers…. What was really neat about the acquisition [of Butterball] was that Carolina Turkeys' world was all about further processed products. I would not say we did absolutely no Thanksgiving whole birds, but they were a very, very small part of our business. Butterball, on the other hand, is the name brand for that. And when we put our top 20 customers and their top 20 customers together, there is something like two that overlap. So it is a tremendous synergy here.
I don't think of farmers as people who spend a lot of time in front of the computer. Is there a culture clash between the farmers and a 21st century purveyor using SAP?
Wells: Times have changed. Everyone is now more technologically savvy, and understands the benefits of good systems and processes.
What about the famous Butterball Turkey-Talk line? Does IT have anything to do with that?
Wells: That was one of the many parts of the conversion. ConAgra had hosted the Web site, and they did a really super job on the Talk line. That was a big marketing push. Unfortunately it was hosted on a ConAgra mainframe. We had to supply new systems for that. We had to vacate the [ConAgra] facility and move down the street a few blocks. We had to migrate all of the tie lines, all of the phone lines, all the feeds they have for media that comes for media day. You'll probably see the Talk-Line on a national TV show. All of that stuff had to be redone -- so all new phone lines, new phone system. It was an incredible effort.
As a matter of fact, I went and visited the Talk-Line last year when it was in operation. We just wanted to see what we were inheriting and what we were going to have to support. It's just really cool. Some of these ladies have been doing it for 20 years.
I have to ask some Thanksgiving Day questions: Do you get a free turkey?
Wells: Yes, we sure do, and they are Butterball.
And the Friday after Thanksgiving -- do you get to snooze?
Wells: It's a workday. So, if we take a vacation day, yeah, we get to.
Is there anything more about IT's role at the company that should be dished up?
Wells: As we started down the road of SAP, it really drove home the point that IT cannot be an afterthought as we move our business forward.
Let us know what you think about this story; email Linda Tucci, senior news writer.