The history of Bord na Mona to the present day reflects the changes in the Irish economy from the time it was formed as a statutory body by the Turf Development Act of 1948.
It was set up to exploit the natural resource, our bogs, which for many people hold the most negative associations with Ireland as a poor, backward, agricultural economy. Yet nowadays the fastest growing business within Bord na Mona is focussed on environmental products and consulting and is staffed largely by young highly educated scientists and engineers.
It is a state-owned enterprise, most unfashionable in these times of privatisation and globalisation, yet it has the PLC status that enables it to act with as much commercial freedom as possible from the point of view of mergers and acquisitions as it seeks to find lucrative new areas of business in which to participate as its traditional businesses decline. And it is run profitably, which some ideologues would admit is an unlikely achievement for a state-owned company.
Information echnology has been part of Bord na Mona since the early 1970s when it purchased its first ICL mainframe to handle payroll processing. Back then, the computer department was a terminal-free punch-card operation with processing and applications in the charge of a team of specialists in white coats, according to
company IT manager Brinsley Sheridan.
Since then, IT has been widely deployed throughout the company with responsibility for application support increasingly being devolved away from central office to the various divisions around the country. In recent years, however, the focus is changing as the implications of a strategic reorganisation have their effect on the role of IT.
Principally, IT has become a more strategic part of the organisation; it is becoming more closely aligned with the business of the company and whereas ownership of new business-critical applications being deployed rests increasingly with the business people rather than the IT people, the way in which the IT department supports those business people is taking the form of a shared services centre with the IT department becoming increasingly centralised at the company’s headquarters in Newbridge, Kildare.
Strategic Intent
Bord na Mona is in the process of a major reorganisation, the result of a Strategic Intent document drawn up by its senior management around 2001-20o2. The premise of this document is that many of the traditional businesses in which the company participates – namely the production of turf and the distribution of other fossil fuels such as oil and coal – are going to decline in the long term as the working bogs become exhausted and environmental concerns force people to seek alternatives to fossil fuels.
To offset this decline and to remain a thriving business, the company will have to develop new lines of business that exploit its current strengths and allow it to remain in existence over the long term.
One aim is to grow the environmental business, says Sheridan. Even though this is still the smallest business in terms of turnover it is the fastest growing in the group. ‘It’s a huge growth area world wide,’ he said. ‘We are taking money from our current cash cows and plugging it in to develop our new businesses, so that as our traditional businesses decline gradually over the next ten years, those new businesses will have been built up to a level where they can contribute to the bottom line.’
Alternative energy and waste management are other areas into which the company is diversifying. It owns a stake in a wind farm and it has many acres of exhausted bog, served by an extensive narrow gauge railway, that will be suitable for environmentally friendly waste disposal.
The company is implementing the terms of this Strategic Intent at the moment. As part of this change, several of the traditional divisions of the company will be realigned as ‘directorates’ and the implications for IT will be an increasing standardisation of the systems that it runs and supports. Principle among these is
a gradual move to standardise the critical company applications on the Oracle Financials ERP suite of applications running on a Linux platform.
Early days
To see how the company is progressing along that path, it is perhaps timely to look at the history of IT within the organisation. The original ICL box was replaced by Honeywell minis that were deployed outside the company’s headquarters, then in central Dublin, to offices around the country.
In the late 1980s/early 1990s, the company put in its first PC networks. At that stage, PC LANs were installed in all administrative offices around the country. These ran Novell’s NetWare operating system, and the company remains a large user of Novell products. (see below)
Around that time a general accounts package called Omicron was introduced throughout the company. This coincided with a shift in the focus of the organisation from a central bureaucracy to a divisionalised structure.
The energy division based in Boora, near Tullamore, supplies peat to power stations to generate electricity; the horticulture division that specialises in gardening products, eg moss peat and compost, moved first to Portlaoise and then to Newbridge; so too is the environmental division that deals with Puraflow septic tanks and municipal waste-water management systems and also does
laboratory environmental consulting for the likes of Intel and HP; the group holding company moved down as well from Dublin to Newbridge as did the fuels business, which distributes coal and oil and manufactures peat briquettes and other peat-based fuel products aimed at the home market.
Autonomy
In advance of the Year 2000 and to solve the attendant problems affecting legacy systems, the company deployed ‘what Gartner calls “tier 3 ERP systems” to its businesses,’ said Sheridan. In keeping with the philosophy of the time, the then MIS (management information systems) department had granted a certain
amount of autonomy to the various divisions. ‘With the divisionalised structure the businesses were given more autonomy and could choose their own system, within certain limitations and infrastructural guidelines whereby each supported its own applications,’ he said.
The IT infrastructure and architecture people were still controlled at the centre by the group holding company, but application support was done by somebody close to the business. As a result, each division deployed ‘best of breed’ systems particularly suitable for their own requirements.
The businesses all had slightly different requirements,’ said Sheridan. ‘The fuels business, for example, is a high transaction weighbridge business, with very high turnover and needing timely transactions so it went for Tetra Chameleon, now called Sage Line 500.’
The horticultural business used a mix of Exact from Notley Cahill and a tier 3 ERP package called Fourth Shift, which is essentially a sales order processing system. ‘That’s the one that’s creaking most at the moment and is most in need of an upgrade,’ said Sheridan. ‘If we were carrying on with the same strategy as before, with each division having its own application support team, most of the divisions would be fairly happy with what they’ve got. But the horticultural business would still be crying out for an upgrade.’
As part of Strategic Intent, the divisions have been reorganised. Fuels, Horticulture and Energy have now become Peat and Allied Businesses (PAB). These are the cash cow businesses. PAB is now a directorate with its own chief executive.
The environmental directorate is the old environmental division renamed but that gives an indication of the strategic importance of that unit and there is also the Corporate & Finance Directorate, which now includes IT.
‘The challenge now is that all the IT systems deployed in the various divisions were designed to fit specific businesses, which was the strategy at the time,’ said Sheridan. ‘Now we want to make the three businesses amalgamated in PAB to be well organised so they can make acquisitions and engage in joint ventures that will enable them to grow their businesses in the future. So we have to manage the entire business as one. We need a universal real-time view of the businesses with full drill down; everything you can’t do when you have separate systems.’
Needing a single integrated system the company decided to install a Tier One ERP system into the environmental directorate. Although it was the smallest of the company’s directorates, it was growing quickly and its IT systems were ‘creaking under the growth pains’ according to Sheridan. ‘We decided that as that was going to be one of the major growth businesses we would put in a Tier One
system. Typically, you would not put such a system into a business with 50 users. But it’s a business that is going to grow and to meet the strategic intent we went live with an Oracle Financials 11i system in February 2003.’
The system was based on Compaq/HP hardware and the Red Hat Linux operating system. ‘It was very successful technically and we learned a lot by doing it,’ says Sheridan. ‘One of the things we learned is that MIS as a function no longer exists. The users themselves own the application. You’re there as a conduit
to make sure it works, but the users are the ones mapping their business process to an IT system. It’s not an IT project it’s a business project.’
Rollout
The successful rollout of Oracle to the environmental directorate will act as a blueprint to deploy the same software to other directorates. ‘Up to now, IT was not strategic here,’ said Sheridan. ‘We did a lot of things from the point of view of saving costs. With the Strategic Intent the idea is to use IT as a strategic tool to
align the businesses that we acquire with best business practices and a robust back office system so that they can continue to grow and diversify the business in an optimum fashion.’
Another part of the Strategic Intent is the establishment of a shared services centre, which will include the IT department. Although it is not fully up and running yet, the shared services centre will be part of the Corporate & Finance Directorate and will have responsibility for all back-office functions such as finance and HR throughout the group. Clearly, IT has been identified as one of the functions suitable for inclusion in shared services. ‘I now work for the head of
shared services,’ said Sheridan.
The adoption of Oracle Financials as the key enterprise application suite for the group has facilitated the establishment of the IT department in the shared services centre. ‘We are going to have just one platform: Oracle, whereas up to now we have had different systems in different divisions,’ said Sheridan. ‘Because there is only going to be one platform we can centralise our support. We will be
using Oracle not just for sales and order purchasing but also for other modules such as payroll and HR. We are currently well into the preparatory phase for rolling out those two modules for the group.’
As a result, the support people who were situated around the country supporting the various applications will eventually be brought back to the shared services centre. There are 700 computer users in 34 locations around the country,’ said Sheridan, ‘although most of them are in Newbridge or Boora.’ The IT department
comprises about 12 or 13 people at any one time, including temporary staff.
Managing change
Clearly the changes brought about by the ongoing Strategic Intent initiative provide an enormous challenge from the point of view of change management. What does he see as the major benefit of a single integrated IT system to run the company’s critical back-office systems?
‘Corporate governance is a huge issue at the moment,’ he said. ‘If we want to see how we are complying to best practice, there are rules we can set within Oracle that will help us comply with that. However, the key thing is accuracy, speed and the ability to drill down. If everybody is using different systems you’re not going
to get the same level of accuracy and reporting. You will not be able to see how one business is doing compared with another. And of course it makes it possible for us to support a shared services initiative.’
But does it work in Mayo?
If system software is to impress Brinsley Sheridan, it has first to pass the ‘Belmullet test’. Such is the benchmark he sets when measuring ease of deployment.
Bord na Mona has long been a user of Novell products and Sheridan, a self-confessed fan, is convinced he couldn’t work without them.
Or at least Bord na Mona couldn’t.
‘I can safely say that without Novell products, this company’s IT systems could not work or function,’ he said. ‘If you want to redeliver Windows to a PC in Belmullet, that’s not easy to do with normal systems. What we can do is deliver a PC to one of our remote locations, tell the delivery guy to plug in the power and
network cables and switch it on and then we can deliver everything to that PC from here.’
Surely you can do that with Windows, or Microsoft’s SMS software?
‘I challenge them to show me that working in Belmullet,’ he says defiantly. They don’t have any reference sites like that. If you have 4,000 machines in two buildings with 30 or 40 people in your IT department looking after them and something goes wrong, that’s not a problem. The problem comes when you have four people looking after 700 PCs scattered around 34 locations down bog roads in the backside of the country with poor comms. That’s not simple.’
Bord na Mona also uses Novell applications such as GroupWise for e-mail and Sheridan claimed to have had little trouble with viruses, at least compared with the woes inflicted on Microsoft houses by the scourge of Internet worms.
The company has also chosen not to deploy its Oracle ERP suite on Windows, opting instead for Red Hat Linux. Since that was deployed, however, Novell has acquired Linux company SuSe and Sheridan admits that it will be considered for future rollouts of Oracle and for an impending SAN upgrade. ‘One of the main reasons for that is local support. We have a long-standing relationship with Novell here and they are big players here. We have a certain degree of clout with
them that we just don’t have with Red Hat and if anything goes wrong, it’s peace of mind for me that we know whose door to knock on.’
26/07/04
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