Kevin Parker: ERP and SOA at The Coca Cola Company

They said there were 15,000 people at SAP’s Sapphire user conference this year, and that the exhibition floor was equal to eight-and-a-half football fields. There was every reason to believe them. The show was huge, and the keynote auditorium had grandstands to accommodate those who wished a view of what was perhaps the largest stage this editor has ever seen.

Being held in Atlanta, however, it also was an opportunity to visit the world headquarters of The Coca Cola Company and learn something of how the world’s best-known brand finds value in its enterprise system of record.

To start, each day, 1.4 billion “Cokes” are served.

To manage its finances, human resources, and supply chain, Coca Cola uses a single instance of SAP for 15,000 users in 45 countries, and encompassing 175 legal entities.

However, as is well known, Coke—as well as the company’s other beverages—is distributed by means of a franchise system whereby Coca Cola sells key ingredients to the 53 bottlers responsible for sales. The result is a network involving more than 1,000 production plants, a delivery fleet five times larger than UPS’, and somewhere between $85 billion and $90 billion of annual revenue.

Many of these bottlers are SAP users too, and according to Jean-Michel R. Ares, Coca Cola senior VP and CIO, these bottlers are keenly aware of the value of integrated processes. In fact, with wide SAP deployment in North America and Europe, and continuing implementation in developing regions, 70 percent of the bottlers’ volume is processed on the vendor’s systems.

“But each bottler implemented SAP separately, limiting integration,” says Ares. “We are working to introduce process commonality.”

Coca Cola recently spent six months examining the possibilities and found, after looking at 400 processes and 100 data elements, that more than 90 percent of the bottlers’ business processes are common across entities.

“SOA [services-oriented architecture] is the key to success here,” says Ares. “Its componentized functionality will allow us to deploy incrementally and to augment the enterprise platform with specialized products where it matters most to our business.”

One complication is that Coca Cola only recently upgraded to SAP ERP 2004. An upgrade to SAP ERP 2005 is needed to begin taking advantage of SOA capabilities. This intervening step was taken, says Coca Cola, because of the need for a stepped process and conversion to Unicode and its multi-language capabilities.

“This is a career-defining project,” says Ares, “and history shows there are risks involved. This program has huge underlying complexity in terms of development and change management. But we have a good idea of the risks and benefits involved. Long term, we want all the bottlers involved. It has to be done incrementally, however, but at the same time quickly and so as to minimize risk.”

The goal isn’t a single ERP instance across all bottlers, but rather common processes for finance, purchasing, manufacturing, sales & distribution, and human resources by means of a common platform.

Later in the week, back at Sapphire, SAP staged a CIO panel in the press room where much of the discussion centered on SOA plans. Of the six panel members, two CIOs were fully committed to SOA deployment as a means to dynamic competitiveness, while the other four said their intentions were to move forward only as business need dictated.

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