Bidfood Netherlands Modernizes While Embracing the Past

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Customer: Bidfood Netherlands
Headquarters: Ede, Netherlands
Business: Online wholesaler for food professionals
Challenge: Deciding which path to take to modernize its business computing environment
Solution: Stepping back from an expensive and time-consuming best-of-breed software and hardware overhaul and returning to its flexible, extensible and homegrown ERP solution
Hardware: An IBM Power Systems S822 server
Software: Visual LANSA, Manhattan Associates, Oracle ATG and several SAP ERP finance modules

Anyone who’s gone through a home-renovation job knows the routine. You determine your budget, decide what fits within it and get to work (or have a contractor do it). But then the plumbing needs updating, the electrical is dangerous and—because these issues must be fixed, no matter how much additional time is involved—labor costs go up. So much for your careful planning and to-the-penny budget.
Hardly surprising, many IT departments face similar situations. Initially, everyone’s on board for application revamps, for example. They determine their requirements, map out their strategy, decide on their budget, choose their preferred software solutions, approach vendors for pricing and perhaps hire an outside consultant to help with the implementation. But lo and behold, their budget suddenly begins to expand, including costs related to development, deployment, ongoing support and labor.

 

As with a home renovation gone bad, only so many options are available to deal with this. Move forward, no matter the cost; live with a half-completed system; or revert back to where you were before undertaking the effort. Of course, none of these are great choices, and it’s up to individual organizations to determine what’s best for them.

In the case of Bidfood Netherlands, the decision was made to make the most of these options. It moved forward with two planned solution purchases and ditched the third, costliest one. It then reverted back to a long-running homegrown ERP package and used an inexpensive tool to upgrade and modernize it.

Although driven by monetary necessity, this hybrid solution actually paid off, with the company now being able to more agilely build upon and enhance its core ERP software, without the overrunning costs associated with its original plan. In fact, Bidfood has actually increased sales by not following its initial blueprints. It wisely adapted to its circumstances and came out ahead.

An Inevitability

Bidfood Netherlands is part of BidCorp, which has branches in 30 countries around the globe, including in Africa, Asia, Europe, the Middle East and South America. Bidfood Netherlands alone has around 1,700 staff members working in 16 locations and a fleet of 350 or so trucks.

Its size is hardly surprising, given its customer base of approximately 25,000 food professionals in the hospitality, catering and institutional-care market. The number of products it offers, more than 60,000 food and food-related items, also speaks to why Bidfood Netherlands is so large.

Bidfood’s IT environment was relatively straightforward prior to its upgrade attempts. It included an in-house developed ERP and warehouse management system—built with RPG and enhanced by using LANSA (an Idera Inc. company)—running on an IBM Power Systems* S822 server. It also included an in-house developed web shop, based on Visual LANSA and an Oracle PeopleSoft financial system.

But then came a strategic re-orientation, with the focus on then-trendy best-of-breed packaged solutions. After evaluating several options, the company decided to move from the ERP and financial system to SAP, the web shop to Oracle’s ATG e-commerce solution and the warehouse management system to Manhattan Associates. All of it would run in a Linux*/Oracle/Db2* environment, and the homegrown ERP system and web shop would be phased out during the transition.

"After LANSA created its proof of concept, we said, 'OK. This is the most effective solution ... so let's try to enhance the skills of our current developers.' "

–Arnold Hendriks, application development manager, Bidfood Netherlands

“We were looking for a replacement for our entire ERP solution, so for the e-commerce part of it, we selected ATG, chose Manhattan for the warehouse management part and, for core ERP functionality and finance, we went with SAP,” says Arnold Hendriks, application development manager with Bidfood.

Another driver for this move was the ill-conceived notion that the Power Systems platform wasn’t flexible enough for future growth. The goal, then, was to move to an integrated Linux/Oracle/Db2 computing environment running on a non-Power Systems box.

These motivators in mind, the company began a stepped implementation of its SAP/ATG/Manhattan deployment and integration, and its eventual move away from IBM i. The first step was replacing PeopleSoft with SAP Financials, the warehouse management functionality of the ERP system with similar functions on Manhattan and the web-shop e-commerce workloads to the ATG solution running on Linux. The second step of the project involved replacing complete ERP functionality with SAP.

Although the implementation of the SAP Finance module went well, the process of moving the company’s core ERP functionality to SAP didn’t. It quickly became apparent that the task was too difficult and expensive to justify continuing down that road while Bidfood, as every company in Europe, was suffering from the economic crisis. Because of this, the company decided to cancel parts of the project and continue using its existing ERP system—which had been in maintenance mode on the Power Systems server during this time—and move forward with the ATG and Manhattan solutions. The SAP implementation had been restricted to finance modules only.

A Large Part of the System

Because the in-house developed ERP system, still running on the Power Systems platform, was once again front and center, it was key that its legacy user interface be modernized so its functionality could be extended. Unfortunately, the IT team lacked the skills necessary to develop the required responsive web applications. That was when Bidfood began looking for solutions to address this and any future development.

It could have used Java*, but the IT department considered it to be costly in terms of coding time and required expertise. The company instead began looking for a tool to do much of the heavy lifting. The first one it came across was indeed faster than Java when it came to coding, but it was too expensive to be used as its primary modernization tool.

“It was a great tool, but the cost was unsustainable,” Hendriks says. “So we looked at LANSA again. We had been using it for, I would say, 20 to 25 years already and it was a big part of our ERP system. Plus, we already had a license for it. We were a couple of generations behind, but we thought we’d give it a try—and we had people on staff who were already familiar with LANSA.”

This familiarity proved to be a blessing when business users in Bidfood’s e-commerce department decided a new customer-loyalty program could positively influence the company’s bottom line. As envisioned, this program would allow enrolled customers to earn points with every purchase and exchange those points for a variety of gifts, such as kitchen supplies and even theme park tickets.

Bidfood explored several development options for this application, including the ATG outsourcing partner, but its quote reflected the huge amount of effort involved in the development of this Java program. It also considered using the first low-code development tool, but this option was dismissed due to exploitation costs.

“It’s very expensive because of the licensing agreement. You have to pay a yearly fee for every customer who can access the application, and when you’re looking at 25,000 customers, those fees can add up very quickly,” Hendriks remarks.

Due to Bidfood’s long history with LANSA, as well as its track record of helping the company with pre-ATG web-based development, it invited LANSA to create a proof of concept (POC) for the loyalty application, which would be judged on a number of factors. These included whether it would meet the demanding graphical criteria of e-commerce business users; whether it was developer friendly and productive; and whether it would perform well in the company’s challenging ERP environment.

It passed all three qualifications, and after Bidfood took over the coding, which was spearheaded by Jos Straathof, a senior developer at Bidfood, it’s since gone into production, allowing customers to sign-up for the loyalty program, keep track of their point balances, and view and order gifts. Gifts can be sorted by popularity, by date or by the number of required points. Ordered gifts are then automatically shipped with customers’ next regular orders.

This is all made possible due to the tight integration between the customer loyalty application and Bidfood’s ERP solution. For example, when an order is delivered, points are added to a customer’s balance on the ERP system and then shared with the web-based loyalty application. Thanks to the program’s success, Bidfood has experienced a 15 percent increase in sales of products included in the loyalty program that help customers earn points. It also now has a rich source of customer data it can tap into.

The Most Effective Solution

When Bidfood undertook its renovation project, it wisely left itself an out by maintaining its homegrown ERP system. Because of this, the company was able to retreat, regroup and reconsider its direction.

Now, it has a modernized ERP application that’s extendable—as in the customer loyalty app—thanks to its use of the LANSA development environment. Bidfood could have used different tools or methodologies to complete the app, but they were clearly too expensive and/or time consuming to actively pursue.

And thanks to its new approach to continued development, complete with the flexibility of its ERP system running on a Power Systems server and LANSA, it’s begun embarking on other projects. These include, for example, an app that, using REST APIs, allows suppliers to view and download Bidfood purchase orders to their own ERP systems and upload delivery information into the Bidfood ERP system.

“After LANSA created its POC, we said, ‘OK. This is the most effective solution for us to develop new applications, so let’s try to enhance the skills of our current developers and introduce them to the specifics of developing a graphical user interface instead of a character-based user interface.’ Thanks to not pursuing the SAP implementation, we’re now well positioned for the future,” Hendriks says.