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Culture of Excellence

Sapporo is tapping into a private cloud to give business leaders new flexibility.

by Aaron Lazenby

May 2016

Sapporo has always been a leader of the pack. The first Sapporo Lager was brewed in 1876 in Hokkaido at the birth of Japan’s beer brewing industry. And while the Sapporo Holdings Company has gone through several iterations since that first bottle—including opening its current Tokyo headquarters in 1994—executive leadership has continuously innovated to connect with changing demand. The goal: to grow the company’s brands across the globe and contribute to customers’ creative, enriching, and rewarding lifestyles.

Snapshot

    Sapporo Holdings

    Location: Tokyo, Japan

    Employees: 7,484

    Industry: Holding company

    Oracle products: Oracle Exadata, Siebel CRM, Oracle E-Business Suite, Oracle Marketing Cloud, Oracle Social Relationship Management

Shigeo Hoshino

    Director of Sales and Marketing, Sapporo Breweries

    Length of tenure: 29 years

Atsushi Ishihara

    CIO

    Length of tenure: 23 years

    Education: BS in accounting, Senchu University School of Commerce

    Personal quote/mantra: “A dream you dream alone is only a dream. A dream you dream together is reality.” —Yoko Ono

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Along the way Sapporo revived Tokyo’s native Yebisu Beer, bringing a popular brand back onto the market. And in 2004, the company started serving up light brew Draft One, which does not include malt—typically one of beer’s four key ingredients. Five years later, Sapporo launched Space Barley, the first beer brewed from malt grown in space. And as tastes evolve in Japan, the company is bolstering the wine and spirits business to meet new market opportunities.

PM16-LeadingStrategies-pic

Atsushi Ishihara (left), CIO, Sapporo Holdings and Shigeo Hoshino (right), Director of Sales and Marketing, Sapporo Breweries

Today, nearly 140 years since that first beer was brewed, Sapporo is innovating again to keep up with customers. The company is modernizing its IT strategy by consolidating its compute architecture onto a private cloud and by expanding collaboration with increasingly savvy lines of business. Here, Profit talks to Atsushi Ishihara, CIO at Sapporo Holdings, and Shigeo Hoshino, director of sales and marketing at Sapporo Breweries, about the company’s move to a private cloud—and how the relationship between business and IT has evolved to keep the company robust.

Profit: Sapporo is known around the world for beer. Where does the beer business fit within Sapporo Holdings?

Hoshino: Sapporo beer is positioned as one of the core businesses among Sapporo Holdings, but we have five pillars of business: Japanese alcoholic beverages, our international business, a food and soft drink division, restaurants, and real estate. But despite our recognizable brands, Sapporo Holdings doesn’t deal directly with consumers. There is always a business that we consider our customer. To get a sense of our domestic scale, Sapporo has 3 million customers just in Japan, including national retailers, convenience store chains, restaurants, vending machines, and regional supermarket chains.

Outside of Japan, we’re pretty aggressive when it comes to international expansion. In 2011, we built a factory in Vietnam and acquired a beverage brand called Pokka, which had operations in Singapore. So we’re currently leveraging that to increase the penetration in the ASEAN market, including Singapore, Malaysia, and Indonesia, where we are involved in a joint venture. We already have a presence in Myanmar and Dubai.

Profit: What unique challenges does this global expansion create for IT?

Ishihara: There are integration issues. When we acquired the beverage company Pokka, they were still running on the AS/400 platform, so we spent three years working on post-merger integration. Plus, Sapporo surprisingly used the same mainframe for 50 years. So we made a specific effort to upgrade the system last year to embrace a more open and modern architecture.

We knew this was our opportunity for a brand-new IT platform. Our new concept is to run the private cloud and use Oracle Exadata as the database platform. We designed the architecture in Japan to be accessible to our overseas group companies. This means we are doing a lot of work, architecting the network and working on server integration—making sure, for example, that departments such as accounting, human resources, and logistics are integrated.

Profit: How did your relationship with Oracle begin?

Ishihara: When I joined Sapporo, we had a very complex, multivendor IT environment. Around the year 2000, Sapporo reorganized the financial system, which is how we learned about Oracle solutions. We installed Oracle E-Business Suite in 2001, which became the basis of our financial platform. Having a complete view of the company’s financial information is critical. In fact, when it comes to making acquisitions, we know integration will be much easier if the company we want to buy is also running Oracle E-Business Suite. This was the case in our recent acquisitions in Canada and Singapore.

At Sapporo, we believe that each line of business should be the owner of the IT system they’re running, rather than having the central IT division controlling everything.”–Shigeo Hoshino, Director of Sales and Marketing, Sapporo Breweries

Profit: What drove your decision to move to a private cloud?

Ishihara: We were already operating both on premises and in a public cloud when we made a decision to adopt a private cloud back in November or December 2015. It was the ideal approach to streamlining our IT landscape.

Many of our lines of business had adopted point solutions, and we had many different versions of Oracle Database running throughout our company. To support this environment, we had to create more than 200 virtual machines. So moving forward, we wanted to improve our operational efficiency by standardizing our infrastructure exclusively on Linux and Windows. So we built our private cloud on Oracle Exadata, and by doing so, we hope to remove 70 percent of our existing servers.

Our plan includes several projects, including moving our data center and global network development. But we prioritized migration of Oracle’s Siebel Customer Relationship Management [Siebel CRM] system to the private cloud, which includes customer and sales data—data about sales of beer, wine, food, and beverages that we sell to retailers, vending machines, and restaurants.

Profit: What does this new private cloud architecture allow you to do for the business?

Ishihara: For one, it allowed our sales team to create a new CRM solution. It was a joint effort between IT and the sales department. We needed people with sales experience to be part of our development team, because they are on the front lines. We needed to hear about their experiences so we could reflect their needs in this project.

Hoshino: Exactly. At Sapporo, we believe that each line of business should be the owner of the IT system they’re running, rather than having the central IT division controlling everything. That said, we do try to keep customization to a minimum. With the Siebel CRM solution, which we run on the private cloud, we are using 80 percent of the package as-is. We encourage our lines of business to alter their process to work with the existing solution, rather than the other way around.

We already see the benefits of this work. . . . and we are looking to capture new bits of data to help with business insight.”–Atsushi Ishihara, CIO, Sapporo Holdings

And that was OK with our sales team: they knew they needed something different. Previously, to create a single report they had to access multiple datasources to get information on customers, financials, and points of sale. It was too time consuming. Data was impossible to share in real time among the various brands, such as Sapporo beer and our nonalcoholic beverages. Plus, when it came to the line items, each of our regional headquarters in Japan used different indicators to describe sales activities. So they each had different business management methods. Every time our salespeople moved to a new region, they had to learn the new conventions. And despite the difficulty our team had with the existing system, our IT team was working hard to operate and maintain it all.

With the new way of doing things, the sales department took the initiative. With the private cloud, our sales team members will be able to share data more easily, which makes them more efficient when it comes to their daily reports, budget reports, and sales forecasts. They can also share lead information more immediately with everyone else in the company. The new infrastructure that IT built made sure the migration went smoothly.

Profit: What is the next step in the process?

Ishihara: We still have a lot of disparate systems in our landscape. So we continue to consolidate all of our existing data and processes on Oracle Exadata, and then run all applications from the other lines of business on the private cloud. Our plan is to finish in July 2017, with the priority being business intelligence, then financials, then human resources, and finally logistics. This will require us to consolidate a huge volume of data.

But we already see the benefits of this work. We have consolidated the data from our retailers and our bar and restaurants division onto the private cloud, and we are looking to capture new bits of data to help with business insight. And we want to extend this approach to our wine, spirit, and food businesses to get a single view of the company.

Hoshino: In addition to further strengthening the sales activities of our beer business, the wine and spirits business is a real growth area for us. Wine and spirits are becoming increasingly popular in Japan, so having better access to our data—not only about our existing customers but also our target customers—can help us achieve new growth. That’s why we are consolidating our data and making it more transparent. We want to give other lines of business the same reliable data that our bar and restaurant sales team has now.

Action Items
  • Database Consolidation on Private Cloud
  • Photography by Shutterstock