Burger King: Managing Change

By Allen Bernard

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Over the past few years Burger King Corp. has gone through many changes. There has been a new CEO and two new presidents, a new EVP and chief marketing officer, a divestiture from its old parent company, Diageo, the opening (and move to) a new HQ, and a major restructuring of its nine divisions, to name a few.

And now that the $11 billion company is on its own, it can no longer depend on Diageo for data center or applications support, such as the of sharing ERP capabilities. It has had to either renegotiate contracts for these services or find new vendors outright.

IT has also been charged with becoming leaner through consolidation and the rationalization of its platforms and vendors as well as communicating better with its 11,220 corporate-owned and franchisee-run restaurants.

Through all of this change, however, there has been one constant, Raphael Sanchez, who joined the company in 1999 and worked his way into his current job as CIO in 2002.

In this exclusive interview with CIO Update, we talk with Sanchez on the intricacies of managing IT for a company in a state of flux while maintaining services to its worldwide operations and franchisers.

New executive management usually means new directions for the company. How have all the leadership changes at BK effected IT?

"That's always the case, but I think in our business ... if you look at our brand we always continue looking for new customers. So our changes are more driven by that and less so by management changes. We have to prepare ourselves for a turnaround and that's pretty straightforward in the sense of what needs to be done."

To do this the company has made major investments in new infrastructure, a new identity management system and portal to make communication with its restauranteurs easier, as well as a new ERP system to handle everything from finance to HR.

"If you have a good strategy ... based upon solid facts there really is no reason to change. And we continue to enhance it, of course. Ever year we review our accomplishments and whether or not we need to speed up some things or change the priority of others."

So the divestiture from Diageo has had more of an impact on IT than management changes?

"When you are in a major holding company you tend to do a lot of leveraging of IT services and products; and providers, for that matter. So, when you get ready to be a standalone organization, you have to slowly migrate to your own relationships with those providers or, in the cases where you can't continue, you look for alternative providers."We firmly believe for us to really provide value to the organization we have to have a very flexible and resilient infrastructure. When I came into the organization, because the infrastructure was shared, there wasn't really what I call a good 'time-line', which is a long-term plan that accounts for a reinvestment strategy into infrastructure.

"Things like a good foundation for building Web access to the different communities to a central identity management system that allows us to manage the security to our system better."

Sanchez's definition of 'foundation' is a platform agnostic infrastructure (wherever possible) and support services like identity management and security that transcend individual applications.

What has been the biggest challenge you've faced so far?

"From an IT perspective its every application we roll out we spend a lot time on what we call 'organizational readiness'; meaning we can do the best system in the world but if the end users don't accept it, we can have the greatest system but (it goes) unused. So my biggest challenge is to get individuals totally in line so not only do they become the first-time users of the system but they also become the thought leaders that offer improvements and better utilization going forward."

To handle this challenge better, in 1999 the company put together a project management office that is responsible for managing change.

"So we've got very, very good at executing pretty complex logistical problems." Over the last five years, for example, they've successfully executed four data center moves.

Data center moves aren't challenging?

"Yeah, logistically, but it's more challenging to get a 100% utilization so you can leverage the benefits you intended to get on a system implementation than it is to roll out a new technology."

What has been your greatest success over the past few years?

"From a technology perspective it's getting the alignment of the organization. We have gained a significant alignment with the business in that our projects ... are led by business folks. We did that as an intentional because it does provide a significant level of buy-in and ownership of the project."

In other words, mapping IT to the business instead of the other way around?

"Yes. I come from a business background; I've always had that philosophy. You really have to look at what problems you are trying to solve before you find a technology rather than having the technology looking for a problem."

With so much happening, how do you know if you efforts are successful?

"We look at three measures. We look at TCO. We look at ROI and we look at 'enabling success'. If we have a program for example that deals with a major business opportunity and IT's an enabler; sometimes success is: we enabled the initiatives and the initiative was successful.

"The other, obviously, is TCO. Some initiatives we do to reduce the cost of ownership of platforms. And we measure that. We do a TCO analysis probably very robust every other year and then we do it pretty religiously every year but probably at a less level of detail than every other year.

"And then from an ROI (perspective); part of the governance is when projects get approved and a particular ROI business case is in place, we do project follow ups on an agreed upon timeline depending upon when the benefits are expected to be realized."

So, basically, you are setting benchmarks first and then going forward with projects?

"Yes, that's the hardest part to do."

And finally, outside of purely technical considerations, what are some of the other challenges of managing so much change?

"A lot of the biggest challenge I have is how do I take the skill sets that I have in the organization, from a technology perspective, and turn them into the skills sets of tomorrow? Integration? Managing? Leadership? Those individuals have a lot knowledge of our business and we find that extremely valuable. So my challenge is how do I take people that were working on 'Platform X' and make them experts in 'Platform Y'; because that's what I will be using in the future."