Avoiding IT obsolescence

Avoiding IT obsolescence

How the IT department at Coca-Cola Bottling Company Consolidated has monetized its services and given business groups a larger stake in decision making.

According to Andy Cheek, director of IT services for Coca-Cola Bottling Company Consolidated (CCBCC), IT departments are becoming obsolete. Quickly. He is describing the big “wake-up call” he received when one of CCBCC’s business teams decided to purchase a hosted cloud service instead of waiting for the internal IT department to satisfy its needs.

“When a business team would rather pay for a service than wait in line and get it for free,” Cheek says, “it becomes abundantly clear that every IT department has to justify its existence. Infrastructure maintenance won’t cut it. It’s all about speed, efficiency, and new capabilities; and if you can’t deliver, someone else will.”

Unfortunately, the traditional IT model made it difficult to deliver. With a fixed supply of IT funding and personnel and the inflated demand that comes with giving everything away for free, CCBCC’s IT department couldn’t get ahead.

“We could never win,” Cheek laments. “Demand was always higher than our budget and resources, and we were forced to tell people to wait in line. By the time we could address the need, it was often too late.”

Cheek knew there was a better way, and set out to “change the game.”

A fundamentally different accounting model
CCBCC is the nation’s largest independent Coca-Cola bottler. The company sells 14,700 cases of Coca-Cola beverages every hour—four cases per second—to the tune of $1.4 billion in annual revenue. But there is constant pressure to do more, whether that is new customer services, better operational efficiency, or territory expansion.

Technology is often the enabler of such advances, and CCBCC’s IT team eventually became a bottleneck.

“We were carrying the full burden of cost and risk and prioritization, and the business teams didn’t have visibility of those variables and couldn’t understand the tradeoffs,” Cheek says. “We needed to give them a stake in the decision-making process.”

To do so, the IT department made the radical decision to monetize its services and support, transitioning from a cost center to a service broker.

“We were very good order takers and system builders,” says Cheek, “but we wanted to become higher-value consultants and orchestrators.”

This required a fundamentally different accounting model:

  • First, Cheek and his team figured out how much of the IT budget was being spent on infrastructure maintenance versus new service requests. The latter was relinquished by the IT department and given to CCBCC business groups, giving them financial resources—and accountability—for their IT requests.
  • Next, the IT team calculated a price for each “unit,” from PCs and laptops to servers and data plans to applications and labor.

“People inherently make better, more informed decisions when they are paying for it,” says Cheek. “By giving the business groups an IT budget and charging them for each unit, they have a much better understanding of costs, risks, ROI, and the timeframe for delivery. And it allowed us to equalize demand.”

  • CCBCC now has more clarity and accountability surrounding the time and cost of technology resources and support.
  • The IT team can better manage supply and demand, and orchestrate at a higher level.
  • Business teams have more choices at their disposal and are more involved in the decision-making process.

“We have much more flexibility, and we can make more intelligent decisions,” says Todd Striegel, systems support lead for CCBCC. “Whether to do something internally or outsource it is now an apples-to-apples comparison, made on a case-by-case basis.”

CCBCC has revamped its technology infrastructure to support this new model, taking advantage of the Intel® Xeon® processor-based Cisco Unified Computing System™. According to Striegel, the infrastructure has provided a consolidated, agile foundation that allows the company to expand and contract its IT resources as needed. It is being used to drive efficiency and reduce the cost of each unit. And it is helping the IT department monetize, plan for, and orchestrate each new service and application.

“I believe every IT shop will have to go through this transition,” says Cheek, “or they will be replaced. Period.”

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