Outsourcing bears fruit for Capespan
The Capespan Group is a leader in the international marketing of fresh fruit, shipping over 60 million cartons of fruit each year, as well as fruit-based products such as juices, wine and muesli cereals. Its brands Cape, Outspan, Bella Nova and Fyffes are known around the world. Products are sourced from over 20 countries, providing fruit all year round for its global customers.
With an overall market share of 30%, Capespan is South Africa's leading fruit exporter. Since the deregulation of the South African fruit market in the 1990s, it has successfully transformed itself into a market-driven organisation and has maintained excellent relationships with suppliers and retail customers.
Like any international business, the company is continually looking to improve efficiencies and keep costs as low as possible. To help in this process, it decided to take a strategic look at which activities were core to its business. “If things we were doing were not directly related to marketing fruit, we realised we should be looking at outsourcing,” said Stef Rigotti, General Manager Information Systems, Capespan (Pty) Limited.
IT ripe for outsourcing
Capespan's IT systems are designed to provide up-to-date information on the status of any consignment of fruit within the company. A data warehouse and a communications network provide easy connection and transfer of information to suppliers, customers and service providers.
The company has developed a sophisticated trading and logistics system, based on client/server technology. It also uses touch screen hand-held terminals to record and analyse fruit quality on arrival, during storage and immediately before despatch. Information is shared within the company, via an intranet, and communicated to growers using web-based stock tracking and sales reports.
With a relatively large IT department, particularly compared to its South African competitors, Capespan decided that IT was one area that was not core to its business so decided to outsource this function. However, IT is still critical to Capespan's success, so it was vital to choose the right outsourcing partner.
“We were looking to integrate our European and South African systems so wanted a single-source partner for both regions,” said Rigotti. “Digica's global base, with operations in the UK, USA and South Africa, was ideal for us.”
“We wanted a base of technical skills that would not be weakened by cost-cutting, and outsourcing helped us to achieve this,” continued Rigotti. “We also wanted to offer our IT team better career opportunities by working for an IT specialist.”
Digica selected
From a shortlist of two, Capespan chose Digica and awarded a contract worth R66 million (£5.7 million) over seven years. Digica had previously been providing server management services to Capespan for 18 months.
“We chose Digica originally as our outsourcing partner because of their experience and understanding of outsourcing in environments of similar complexity and size to ours, their approach and professional execution and their willingness to take on the challenge of starting a new operation in South Africa,” said Rigotti. “We deliberately looked for an organisation for whom Capespan would be a relatively large client, so that we would be important to them.”
Thirty-five staff were transferred from Capespan to Digica in Cape Town. “The effort and expertise applied by Digica made the transition smooth and successful,” commented Rigotti.
Outsourcing activities
Under the outsourcing contract, Digica delivers services to Capespan in three main areas.
Firstly, it provides round-the-clock operations and technical support for Capespan's 32 servers running on a Windows 2000 platform. The servers are located in two data centres in Cape Town and linked by fibre optic cable. Each data centre has 24-hour site security and resilient power, communications and environmental controls. This provides a high level of overall resilience and will enable Capespan to fully-implement its disaster recovery plan.
Secondly, Digica manages and provides helpdesk support for 400 desktops at Capespan, across 12 sites in South Africa, which are running Microsoft Office, Lotus Notes and Windows 2000. Digica remotely manages the desktops from its Cape Town offices. This dramatically reduces support time and cost for Capespan.
Finally, the outsourced operation supports and enhances Capespan's applications written in LINC and Delphi, running on Oracle. These applications are mostly customised to the company's specific needs.
Benefits exceed expectations
As well as reducing costs, outsourcing has improved the service to Capespan. Its IT infrastructure is now more resilient with full disaster recovery procedures in place. The monitoring of IT services has also improved. Weekly project meetings are used to review the past week and set priorities for the next, and formal monthly reports provide an assessment of service quality and activity.
Since the contract started, Digica's work has expanded to provide services to Capespan in the UK. This work is in two areas: bespoke application development and Oracle database monitoring. Capespan UK decided to work with Digica because of its experience in the fruit import and export industry, and the cost advantages of off-shore development.
Fifteen months into the outsourcing contract, Rigotti has been delighted by the service he has received. “Our operational expectations have been exceeded, and Digica has been very responsive, particularly in South Africa. If I have a problem, I just pick up the phone.”
While the contract is managed under strict service level agreements (SLAs), Rigotti has been impressed by a willingness to go further when required. “We can see that Digica is paying particular attention to our needs. Even if things aren't strictly covered by the SLA, Digica bends over backwards to ensure that things work for Capespan.”
“Digica's global base, with operations in the UK, USA and South Africa, was ideal for us. Our operational expectations have been exceeded, and Digica has been very responsive.”
Stef Rigotti, General Manager Information Systems, Capespan (Pty) Limited