Colgate Palmolive, a company where its headquarters is in New York operates in the business of care within the consumer goods industry. In an Annual Report released by Colgate Palmolive Company (2010), it is reported that the company is a $ 15.6 billion global company serving people in more than 200 countries and territories with consumer products that makes life healthier and more enjoyable. The core businesses of this company are Oral Care, Personal Care, Home Care and Pet Nutrition. Among some of the world’s most recognized household brands produced by Colgate Palmolive Company are Colgate, Mennen, Palmolive, Ajax, Softsoap, and Hills Pet Nutrition.
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Colgate’s business strategy is to Win on the Ground by focusing on it’s three core strategies: Driving Growth, Funding the Growth and Making Colgate the Best Place to Work. Its corporate values of Caring, Global Teamwork and Continuous Improvement acts as the foundation for its business strategy and are reflected in the way the company conducts its business worldwide (Colgate World of Care, n.d.).
Colgate Palmolive Corporate Structure
Led by its current Chief Executive Officer and President, Mr. Ian Cook, Colgate Palmolive Company is staffed with a team of talented and dedicated employees. The company’s corporate structure has been assumed to be shown in Appendix 1. Streaming in to the Global Information Technology (GIT) organization itself, this organization is divided into three main sub functions which are Global Development, Enterprise Center and Shared Services Organization. The Shared Services Organization is further divided into four main divisions which are Global, Americas, Euro Americas and Asia Pacific.
Colgate Palmolive Malaysia, founded in 1957 where the company office and plant is located in Petaling Jaya is supported by Asia Pacific division which is better known as Asia Pacific Shared Organization (APSSO). APSSO serves approximately 3500 employees in terms of Information Technology and it’s infrastructure in over 35 manufacturing sites throughout the Greater Asia and South Pacific division.
Colgate-Palmolive Business Strategy and Relationship with Business Entity
The main mission of Global Information Technology which is also cascaded down to APSSO is to operate on the same system, providing the same information to ensure the same performance and processes throughout the Colgate Palmolive Company’s global operations worldwide. To achieve this mission, APSSO focuses on a 5 years strategy plan which is driven by a grid like Casita. This grid is derived from a stringent process which priorities the projects according to the GIT’s mandates of Performance, Reliability and Regulatory, Utilization, GIT Grid Strategic Portfolio and Global Projects.
The Global Information Technology partners five global external entities to ensure the success of its businesses. Colgate partners one of the world’s most renowned enterprise software developers, SAP. Aside from SAP, Colgate partners IBM and Lenovo for providing the company computer hardware, Verizon for networking and telecommunications, CISCO for LAN equipments, Wipro for consulting and resource management as well as Comvault for data management and storage. The details of Colgate Palmolive infrastructure will be discussed in Part 2: IT infrastructure: Issues and Challenges. Colgate Palmolive specifically in Malaysia does not partner any government entities for its IT infrastructure.
The homepage URL of the Colgate Palmolive Company is http://www.colgate.com.
Part 2: IT Infrastructure: Issues & Challenges
2.1 Colgate’s IT Infrastructure
Information technology infrastructure today is composed of seven major components (Laudon & Laudon, page 203) and Colgate is not exceptional in investing in a comprehensive array of hardware & software to help with its daily operations. The below is a list of IT infrastructure that Colgate is currently having:
1) Computer Hardware Platforms. Colgate’s permanent employees are given laptops while temporary employees are provided with desktops.
a) Laptop: Lenovo ThinkPad 410: Intel i5-520M, Intel QM57 Exp, 14.1″ XGA, Intel HD Graphics, 160GB 7200rpm, 4GB (2x2GB), N6200 11a/b/g/n (2×2), 6 Cell.
b) Desktop: Lenovo ThinkCentre M58p: Intel® Core 2 Duo Processor E8400, 2GB, 160GB 7200RPM S-ATA HDD, PCI/PCIe SFF (2×3),Intel Graphics Media Accelerator 4500,DVD Rble, Intel Gigabit Ethernet.
2) Operating Systems: Colgate is currently using Windows XP Professional but they are planning to rollout Windows 7 Professional in the 4th quarter of 2011.
3) Enterprise Software: Colgate uses SAP R/3 Enterprise for virtually all its departmental business units.
4) Networking/Telecommunication: Colgate enlists Cisco Systems and Verizon Communications respectively as its business partners for their networking and telecommunications needs.
5) Consulting & System Integration Services: Colgate recruits Wipro Technologies to assist with new technology building as well as managing new projects.
6) Data Management & Storage: Colgate counts Commvault as its business partner to manage its data management and storage.
7) Internet Platform: Colgate uses Microsoft.net to support its website. It uses the
2.2 Issues and Challenges in the management of IT infrastructure
Even though Colgate has a relatively stable IT infrastructure in place, there are bound to be issues and challenges that the organisation faces in the management of its IT infrastructure.
One of the most prominent challenges would be to keep abreast with the technology advancement. As Moore’s Law suggests, the number of transistors on a chip roughly doubles every two years. (Moore’s Law, whitepaper from Intel). Colgate has a strict workflow when it comes to implementing new hardware, which includes going through the many layers of manual approvals from the upper management, most of them scattered throughout the globe. By the time IT department is ready to implement the new hardware, newer version would have already been introduced to the market.
Security is also a major challenge for the IT department in Colgate. As with any multinational corporation, Colgate takes pride in their product’s secret formula, new product launches and confidential employee’s information. Hackers and PC infections are a big risk to the company. This is due to the many software that Colgate uses. Although each laptop and computers are linked together via the Colgate network, these software are independently installed into the computer, and this making it difficult for the IT department to monitor the health of each hardware.
Another challenge is to manage Colgate’s business partners such as Cisco, Verizon, Wipro and Commvault. As the business partners are vital to Colgate’s success in managing IT, they have to be exposed to Colgate’s culture and its ways of managing business.
Perhaps the biggest challenge of all would be to manage the internal cost. The IT department is given a budget of 1.5% of net sales for software & hardware acquisition, installation, training, support and maintenance. This budget also includes downtime as well as space and energy needed to keep the technology running.
IT has to play its role in maintaining Colgate to be the leading consumer products company in the world. The above IT infrastructure has be to integrated seamlessly in the running of daily business activities, and this would require the IT department to be the ultimate business partner to Colgate worldwide.
Part 3: Cloud Computing and its business benefits and costs
3.1 Overview of cloud computing
Cloud computing is defined as “a model of computing where firms and individuals obtain computing power and software applications over the Internet, rather than purchasing their own hardware and software” (Loudon & Loudon 2010, p. 196). The five essential characteristics of cloud computing are assumed in Figure 1 (Mell & Grance 2011)
On-Demand Self Service
The on-demand self-service characteristic of cloud computing allows employee to use cloud computing without human interference with the cloud provider. Employees can login in the network by keying in a unique password given to them.
Broad Network Access
Ubiquitous network access is available to employees via cloud computing. The network can be access by all employees through a standard mechanism. Employee would only need to key in their password and once the system authenticates it, employee can access to all resources available in the network.
Resource Pooling
Resource pooling allows employees to access cloud computing without having to bind to location where they are. All employees within the Colgate world would be able to access the same database and same network from even their homes. This is also a step taken to encouraged employees to strike work life balance in their workplace.
Rapid Elasticity
Cloud computing promises elasticity where resources can be scaled both up and down as required. This will allow standardization and for Global Information Technology to achieve its mission of operating on the same system, have the same information for all its employees, which in turn ensures the same performance and processes throughout the Colgate world.
Measured Service
The number of employees accessing the service is measured and monitored to ensure that the cloud is able to optimize its service and to sustain the agreed service level for all employees.
Figure 1: The five essential characteristics of cloud computing
There are three main types of cloud computing which are public clouds, private clouds and hybrid clouds. Public clouds are usually operated by a third party company where more than one party or customer can be mixed together and can access the servers or storage system at once. Private clouds are usually on demand infrastructure owned by a single customer who controls the applications run On the other hand, hybrid clouds are the combination of both public and private cloud models which usually offers high sustainable on-demand and externally provisioned scale however adds complexity to the distribution of applications throughout the different networks
(Isse 2010, pg 18).
3.2 Current trends in cloud computing
In a cloud computing survey done in 17 countries in North America, Europe and Asia Pacific by Kelton Research in 2009, the results shows that technology is used to cut cost in 54% of the companies surveyed. One of the technologies discussed was cloud computing which allows companies to quickly react to market conditions and competitors. By having cloud computing, companies can use this ability to immediately tap computing power and software which in turn help company focus on its core business. 99% of its respondent also claimed that they are discussing or implementing public and private cloud computing solutions.
3.3 Benefits of cloud computing
Information Week’s Thomas Claborn reported (Calburn, 2008) on a presentation by Thomas E. Hogan, senior vice president at Hewlett-Pakard, at the 2008 Cloud Summit Conference:
“Some 87 billion emails are drafted per day around the globe, the digital universe doubles every 18 months, and the number of network-attached storage devices double every two years”, he said. “Yet, some 80 percent to 85 percent of IT budgets goes to operational maintenance. ..Cloud computing promises to help IT organisations dial back maintenance cost so they can spend on creating business values.”
To ensure sustainability and competitiveness of Colgate’s business, cloud computing can be an option to reduce cost, maintenance complexity and ease of management. Among some other of the benefits of cloud computing are discussed as below.
Availability of standardized data
Cloud computing plays a vital role in ensuring that Global Information Technology achieves its goal to providing the same information at the same speed to Colgate’s entire employee. This allows managers to make decision based on the same set of data irregardless of where they are located. It also ensures data integrity and allows more decision collaboration between countries as they have access to all sets of data.
Business Agility
Cloud computing allows managers to have access to data anywhere at any time. The benefit of cloud computing not being device and location dependence allows managers to make faster decisions to gain competitive advantage by responding rapidly and reducing time to market.
IT efficiency
Cloud computing increases the efficiency and allows ease of management of information technology. For instance when they is a need for a system upgrade, cloud computing allows managers to push the updates at the backend through the server and all employees will receive the auto run update at the same time. This reduces time of IT personnel to individually install updates on each computer, ensures that all computers has been upgraded simultaneously and increases efficiency as updates need not be bonded by boundaries and time zone.
Implementation of “one system for all” concept
The implementation of cloud computing allows standardization in term of systems processes and speed. This will reduce the maintenance cost, ensures data security and provides every employee an equal opportunity to obtain data to make quality decisions. For example, an employee in India will be using the same system as an employee in Russia. This facilitates knowledge sharing among employees and also transfers of talent throughout the Colgate world. It allows our global customer (ie: Tesco, Carrefour) to make business decisions on a global basis based on the availability of standardized data and the way of doing business with Colgate.
3.4 Cost of implementation of cloud computing
It is crucial to determine the return of invest and total costs of ownership to senior management before being able to influence them to make decisions on whether or not an organisation should invest in the system/infrastructure. The total costs of ownership looks into nine areas which are:
Hardware acquisition
The cost for purchasing of computing power might be higher at the initial stage when setting cloud computing however the return of investment in the long run might justify the initial investment.
Software acquisition
The licensing for software used within Colgate might decrease if the company decides to subscribe to Software as a Service (SaaS) applications such as Salesforce.com. SaaS applications allow users to pay as they use. This decreases cost of purchasing licensing for the whole package of software but employees only use partial applications within the package.
Installation
Installation cost remain constant with or without cloud computing. Colgate advocates providing the same infrastructure and computing power in terms of both hardware and software for all its employees.
Training
Trainings for implementation of cloud computing can be done via three methods. Firstly, the company can deploy collaboration tools to allow virtual training. Secondly, training can be deliver via an online knowledge portal (ElementK) which the company has subscribed to and lastly via classroom trainings for more technical personnel. The cost of training (in terms of travel) can be minimized by having power users within subsidiaries of Colgate to train employees of their own division.
Support
The implementation of cloud computing allows a standardized support of IT employee for every employee. By having a standardized system and processes, IT employees now need not have different sets of manual to provide differing system support.
Maintenance
Cloud computing eases the maintenance of systems and upgrading of both hardware and software. By implementing cloud computing, all upgrades can now be push from the backend of servers to each computer.
Infrastructure
Investment in specialized equipment and network at the initial stage is required. However the yield in the long run surpasses the cost of initial investment made. It also allows business to replough back the cost used to maintain IT systems to the core of its businesses after the implementation of cloud computing.
Downtime
The downtime of servers that support cloud computing can be managed internally. Although downtime cannot be eliminated, it can be minimized to ensure minimal disruption to the business. Downtime can be planned and communicated to employees at earlier so that employees can plan their work accordingly.
Space and energy
Part 4: Recommendations of cloud computing adoption/adaption
Based on the issues and challenges that have been discussed in Part 2, it is vital that Colgate adopts a technology that will enable the company to move forward in the era of information technology.
However, due to sensitive and confidential information that Colgate has to protect, they are not able to outsource to external providers such as Salesforce.com. Hence, it is recommended that Colgate invests in a private cloud which only employees of the organization can access, with the option of having their business partners obtaining a certain amount of information from the cloud.
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With the use of the cloud, the IT department will no longer need to go through the manual layers of approvals needed to implement new technologies. By creating an approval system that links to the email system, approvers will need to simply login into the cloud to sanction the requests, regardless of time zone and location once they receive email notifications. This will further simplify the approval process and the IT department will be able to rollout new technologies, thus enabling Colgate to be, if not in the forefront, at least keeping up with the latest technology compared to their competitors.
Colgate’s IT department’s objective is to have the same systems, same information, same processes and the same performance everywhere across the Colgate world. With the implementation of a cloud, a series of commonly used software can be stored in the cloud. Employee’s laptops and desktops will merely be terminals to access the cloud. Hence, using the method of single sign-on username and password, this would allow the IT department to have further security measures as well as enabling them to monitor the health status of each of the terminals.
Business partners can be given limited access to the cloud, thus exposing them to Colgate’s workflow, processes and cultures. This in turn would assist them to understand how Colgate manages its business and how they are able to contribute more efficiently towards Colgate’s success.
Cost has always been a challenge to most organisations. A resourceful firm can fully make use of a budget of 1.5% of net sales to stay ahead of competitors by investing in a cloud. As mentioned in Part 2, Colgate currently has independent software installed in each computer. By implementing a cloud, instead of having the IT personnel physically installing the software in each computer, which may take a few weeks, depending on the location of Colgate offices, they simply need to load or upgrade the software into the cloud, enabling employees to use the latest software within days, if not hours. On top of that, the cost of travelling for IT personnel to install these software will be very minimal.
In line with business needs, the speed of change will be beneficial not only to Colgate, but also to their employees as they will be exposed to newer technologies/software in order to be more efficient in their daily tasks, thus reducing time needed for business to wait for processed information from the employees.
Currently Colgate in every location around the globe has their own set of servers and data storage system within each subsidiary. With the implementation of a cloud, Colgate will only need to have these hardware investment and maintenance in one particular site only. IT departments can be much leaner, more efficient and more focused in their areas of expertise.
Colgate has always been prudent in investing in any type of technology. The local IT department refers to a grid that lists the yearly initiatives that they will need to implement in every subsidiary. This grid consists of requests and is essentially an approved wish list from each business unit on implementing certain technologies within the department. Colgate’s business strategy to balance both technology and the demand from employees on the ground is important to achieve strategic goals. The yearly resource of 1.5% of net sales has always been the budget that the IT department has to adhere to. Given this allocation, the IT department has to be judicious in spending, balancing the business needs, keeping the current technology abreast with the market as well as being ahead of competitors.
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