Sodexo’s digital transformation saves millions
By on April 11, 2017
Filed under Manufacturing & Resources
Global facilities management giant, Sodexo, has begun a world leading major digital transformation initiative that is rapidly changing the face of the facilities management industry.
Sodexo’s transformation embracing cloud computing, the internet of things and advanced analytics is already saving tens of millions of dollars through efficiency gains with one client has already announcing a savings of tens of millions of dollars in the first year as a result.
While costs are being shaved, the operational transparency now being achieved is also enhancing safety, ensuring accountability and providing important insights to senior managers to shape future strategy.
Each day Sodexo provides services to more than 75 million people, in multiple sectors across 84 countries, and employs more than 425,000 people internationally.
In Western Australia, where the company delivers integrated facilities management services to a range of enterprises including some of the nation’s leading miners, more than 6,000 workers are transported to and from their work each day; over 18,000 meals are cooked and consumed each day; more than16,000 rooms are serviced; and around 23,500 smoke detectors are managed and maintained.
Companies that use Sodexo services include mines, corporate, schools, offshore oil rigs, aged care, and prisons, all of which are exploring the option of using Sodexo’s multiple facilities management services rather than relying on the more cumbersome single point provider model.
One client has streamlined dramatically, turning to Sodexo to deliver the matrix of services once provided by 600 separate contractors – delivering unparalleled transparency and accountability from a single industry partner.
Increasingly companies are looking to outsource all non-core service delivery aspects of their operations.
Sodexo has called this trend “mutualisation” and works closely with the client to deliver a comprehensive and integrated suite of services that might include building management, transportation and property management, for example.
The more comprehensive the range of services delivered by Sodexo the greater the opportunity to achieve operational efficiencies which are shared by both Sodexo and its clients.
But that’s only possible with a clear understanding of what’s going on under the hood. To ensure the successful delivery of the suite of different, but related services Sodexo requires a sophisticated and integrated information platform as its digital foundation.
In the past Sodexo relied on a plethora of standalone computing systems which were not integrated. Achieving clarity about individual service contracts, delivering useful information to workers, or providing comprehensive enterprise-wide vision for senior management proved a significant challenge.
Now, in order to ensure that employees are empowered to deliver the best services to clients, with flexible access to intuitive information systems Sodexo has deployed an Azure based information platform. In concert with Dynamics 365 the new platform supports employees, delivers much greater enterprise transparency for Sodexo management, and genuine clarity for clients.
Paul Bean, Sodexo’s CEO, Mining, Asia Pacific has been the lead architect and champion for the digital transformation project which is now clearly delivering significant benefits to the company and its clients.
He says that the benefits to customers vary depending on the Sodexo services they use, the scale of the business and the sector in which they operate.
Australia is the first market in the world where Sodexo has introduced the latest integrated facilities management processes and currently leading the global market with technology a critical enabler of effective field management.
Bean explains that in the past the nature of the FM industry meant different systems were utilised for different services, as well as various client platforms. This resulted in difficulty to obtain the true enterprise transparency the organisation craved.
However cloud computing and the sort of integration that Microsoft has pioneered across its software means that it’s now been possible to create a digital platform to help Sodexo tackle a range of significant operational challenges. And it’s been achieved swiftly.
Working with Microsoft gold partner Velrada, Bean says; “We mobilised pretty much from scratch in six months a project encompassing multiple remote sites spanning many different services that would traditionally have taken two and a half years.”
By transitioning to Azure and Dynamics 365 Sodexo now has flexible, scalable access to a completely integrated information system.
Dan Hookham, Velrada director, says that to build equivalent functionality from best of breed solutions – which was Sodexo’s original global plan – would have required integration of 20-30 different systems, and injected immense complexity and significant cost.
Instead Dynamics 365 has been implemented across the organisation. This is initially focusing on customer service and field services and is also being used as the foundation for a secure cloud-based client portal allowing end user self-service, feedback and status updates. Hookham says clients can now see in real time how well Sodexo is delivering services at each of their locations.
Sodexo management meanwhile has live data online dashboards and reports that clearly reveal overall contract performance and transparency across the enterprise in real time.
Applying Dynamics 365 Field Services has had a significant impact on Sodexo’s ability to make profitable decisions. An example explained by Bean Sodexo has around 300 field service technicians who are operating in geographically remote locations and can have considerable distance between jobs.
“Knowing from every trip the vehicle’s performance, the value of the stock it’s carrying, the time it is productive, the total cost of the vehicle and the recoverable revenue from the trip gives a true metric of profitability.
“This then allows field allocation based upon metrics that determine profit. Different utes may be used with different stock, certain drivers may only use certain vehicles, different weather may restrict the usage of certain vehicles.”
According to Bean the tight integration across Microsoft platforms, particularly Dynamics 365 and Power BI, also means that; “We can create unique records for clients and see all the activities on one client from one place – be that field-based activity or customer service or billing.”
With a single integrated collection of core data there is complete transparency and accuracy that would be difficult to achieve from siloed systems. “It makes for a cleaner environment in which to operate and the data itself becomes more reliable and gives you richer and deeper information about the services provided to the client,” he adds.
Having a secure and resilient cloud based solution has also addressed the ever-present challenge of distance. Sodexo clients may be located 6,000 Km distant from head office – in remote regions of Australia and on offshore rigs. While the firm’s operations centre is located in Perth, Azure and Dynamics 365 is accessible by anyone authorised, from anywhere, at anytime.
Moving to Azure and Dynamics 365 also opened the door for Sodexo to embrace other Microsoft technologies including Azure machine learning, predictive analytics through Power BI and to leverage Internet of Things devices through Azure’s IoT Hub.
Bean explains that the first IoT initiatives involve water treatment inspection, a service offered by Sodexo that was previously almost entirely manual but in time will be managed by the digital platform.
“Standard current practises mean our employees have to go out three and four times a day to sample water, then gather results and based on the results make decisions about adjustments to water treatment. Now as we implement sensor technology we monitor a lot of the water characteristics and collect them at the IoT Hub,” he explains.
The result is Sodexo no longer needs to send employees out for routine checks, instead only when an anomaly is identified or forecast by predictive analytics.
Paul Bean explains that Sodexo is seeking to automate as many routine tasks as possible – from water inspection, to air conditioning servicing, or managing 300 buses and their drivers spread over an area the size of California.
It’s not just to save money, instead Bean stresses; “It’s about learning and knowledge – collecting the source data.”
He says in the near future automated sensors could be used for temperature checks on food, machines or the environment. “Correlating that temperature information with other data means we are able to form a better understanding of the performance of assets, assess any impact on our people’s health and safety and generally make better decisions.
“Automating temperature checks in itself is a pretty uninspiring thing – but automate that and align it to other data sources and you can start to compare trends and performance. That becomes interesting,” he says, as it allows predictive maintenance and improved utilisation of assets.
Efficiencies and impact
In terms of the overall business impact Bean says the digital transformation is delivering productivity and efficiency benefits. “We have more empirical views of how we are actually operating.
“Many organisations work to traditional measures like cost of labour or the cost of raw materials. This system allows us to go deeper and understand where efficiencies can be delivered through integrating services more, or in some cases less.” That’s critical for the mutualisation model to work well.
Says Bean; “The system is a component that enables those savings and efficiencies to be made – it’s not the only component but it is an important component and it’s the difference to me from being able to make a 10 per cent saving and a 15-20 per cent saving for a client.
“Information is king and if you haven’t got the empirical data then every decision you make can influence positive or negative cost results.
“This gives us certainty – I talk in the business about which levers to pull. Well the technology delivers a clearer understanding of the impact of change. We can analyse the financial impact on us and the client if we change a route or a schedule.
“As the system matures and the data provides a richer output – then the efficiencies and opportunities for optimisation become stronger and pretty dynamic. When the client’s world changes we are able to change with it and predict with reasonable certainty what the impact will be on them and us.”
Offering the example of mining companies operating in Australia’s remote regions, Bean says that the technology platform is providing granular insights allowing operations to be optimised. Mining often requires labour forces to be flexed at various times, and that has an impact on associated supply and logistics.
In the past however it has been difficult to optimise Sodexo’s mine service operations. Now Bean says; “The system allows relative predictability,” permitting Sodexo and its clients to optimise operations and the cost base.
“It gives you absolute certainty of the impact of change and the impact on cost,” he says.
Technology transformation is important; but in today’s world business transformation is imperative.
Here also, Bean says technology is proving a key ally. Supportive and empowering technology can be rolled out incrementally to help people do their jobs more efficiently and safely, while the data collected by the new system and the transparency that affords is helping to drive cultural change across the business.
“The change has to be incremental – any big change comes with a massive cost. We have taken what people are doing today and advanced that activity. So a trade employee takes what they were already getting on a tablet as a work order and then we add one or two extra activities. It’s far more productive and reliable than a whole new way of working.”
He acknowledges that; “This is another industrial revolution” and may take generational change before the full capabilities of technology can be fully applied and exploited.
Already however cultural reform is underway. “We have found a strong level of enthusiasm from the teams to improve and streamline the way things are done,” with end users and development teams collaborating on how new features are developed and deployed.
Data alone is having an impact with performance metrics positively impacting employees.
“We monitor the performance of all our drivers, the vehicles, productivity and efficiency. Once we surfaced the data we saw rapid and dramatic improvements – if the individual can see the data relative to themselves they feel more part of the solution.
“We saw a clear shift in driver behaviour over days – not weeks – to be more compliant with standards – and that never dropped back.”
Sodexo meanwhile is not looking back.