Smart Wins: Seeds of Efficiency

Smart Wins: Seeds of Efficiency

How Swedish agribusiness Lantmännen cultivated a more cost-effective infrastructure.

For a $5.5 billion agricultural cooperative whose 42,000 farmers work cohesively across 19 countries to supply food and farming services, Lantmännen’s IT infrastructure was surprisingly unwieldy.

“Because we’ve been around since the 19th century, our [IT] was decentralised,” recalls Dennis Jansson, Lantmännen’s chief security officer. “As long as we were decentralised, we had no control over backups, our fixed costs were high and we didn’t know when one of our sites had a problem.”

Jansson had to cultivate a more manageable environment and opted for a two-pronged approach. First, deploy wide area network (WAN) optimisation appliances from Riverbed Technology, then virtualise servers using VMware.

Over two weeks late in 2008, Lantmännen deployed WAN optimisation appliances at 90 sites and expects to install them at another 200 locations -- mostly production facilities and offices -- within the next 18 months. These appliances use caching to minimise the amount of data traversing the company’s network and provide local access to applications anywhere in the organisation. As a result, Jansson says, WAN optimisation has bolstered application performance and reduced bandwidth consumption. So much so, in fact, that plans to install a 10MB fibre optic broadband for the enterprise have proved unnecessary -- a saving of $650,000.

WAN optimisation has also helped Lantmännen develop a quick-fire formula for business expansion. In the past, integrating the complex IT infrastructure of a newly procured company, which entails configuring systems for secure data exchange and ordering additional network connections, could take Lantmännen three months. However, by installing WAN optimisation boxes on the network, Jansson says he can get a new location up and running in as little as three days.

Another way Lantmännen has eased IT headaches: consolidating servers. To date, more than 1000 servers have been virtualised across more than 70 locations, with plans to replace thousands more in 350 additional facilities and offices. Lantmännen expects savings in servers, energy consumption, telecommunications and head count to amount to more than $60 million in five years.

Nevertheless, Jansson says that planting the seeds of an IT overhaul in the minds of Lantmännen’s senior executives was a chore. After all, says Mark Tauschek, an Info-Tech Research Group analyst, “depending on the number of sites a company has, [WAN optimisation and virtualisation] can be significant undertakings and capital expenditures in today’s economy”.

Even Jansson admits, “things were shaky for a while”, as the company began overhauling its entire IT infrastructure without any promise of recouping its investment for at least one year. Fortunately, he says, “Lantmännen has a governance model where everyone sits down, introduces a business case to all the IT managers and everyone has a say. And this is the way we wanted to go as a group.”

How it adds up

Lantmännen, Stockholm, Sweden Lantmännen is an agricultural cooperative owned by 42,000 farmers that operates in 19 counties, has 13,000 employees and revenues of $5.5 billion.

How Lantmännen Saved: By deploying WAN optimisation appliances and introducing server virtualisation technology, Lantmännen expects savings in servers, energy consumption, telecommunications and head count to amount to over $60 million over the next five years.

Tools Used: WAN optimisation appliances from Riverbed Technology; VMware virtualisation software.

Time Frame: Four months spent testing and evaluating hardware solutions. The customisation and deployment of the technology was completed in two weeks.

1 Know Your Vendors Rather than leave the vendor selection process up to Lantmännen’s procurement department, Jansson adopted a hands-on approach, reading through product handbooks, personally meeting with product managers and developers and measuring a potential application’s usefulness against specific business needs.

2 Set Deployment Targets Clear priorities guided Lantmännen’s WAN optimisation and virtualisation rollout. Because the company’s core business revolves around the production of everything from baked bread to cat food, production facilities dominated the first phase of the project while most office deployments were left for later.

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