Celestica designs, manufactures and ships complex electronic components for international clients, manages customer relationships, operates

end-to-end supply chains and logistics, and develops processes and software to support its clients. Based in Toronto, Canada, Celesticas revenue was US$6.1 billion in 2009. The company employs more than 30,000 people in worldwide locations, such as China, Hong Kong, Malaysia, Mexico, the USA and Romania. Razor-thin margins in the global EMS sector result in an ongoing focus on managing costs and delivering the lowest Total Cost of Ownership (TCOOTM) for its customers. For many customers, Celestica develops new, more cost-efficient supply chain solutions, creating processes and services that are often supported by advanced software. The in-house and external application developers to whom these tasks are assigned may be located many thousands of miles apart. Managing such geographically diverse teams across multiple time zones presents a significant challenge. In many cases, Celestica also manages the critical end-customer relationships, shipping final products and accepting returns. Customer satisfaction issues, product failure rates and delivery fulfillment rates provide essential performance feedback for both Celestica and its customers. If Celestica could capture, analyze and act on this data, the company would be able to enhance its cost-effective supply chain offering with after-market services that would deliver significant value-added client solutions. Arpad Hevizi, VP of Supply Chain IT Solutions, Celestica, comments, The main challenge is to constantly reduce the operational costs for existing systems, and reinvest the savings into new functionalities that will further drive efficiency. Celestica operates a comprehensive internal software and services development program to support these objectives, which covers both client-facing and back-office business enablement processes, from finance to human resources. This internal program itself is subject to constant cost-reduction and reinvestment challenges, even as we look for ways to enhance client service and after-market offerings. Leveraging SAP applications Celestica manages its critical business processes, from manufacturing through to after-market service, using SAP applications for some 7,000 users. Because Celestica interacts directly with the end-users on behalf of its customers and deals with orders, payments, deliveries and product returns, it is able to capture, analyze and share a wealth of information that can be used to refine business processes and customer service. SAP applications form a central part of an integrated operation, where Rational Team Concert provides the rapid application development alongside Lotus Notes and Domino for messaging and business social network. Arpad Hevizi says, SAP is excellent at core processes. In part it depends on the degree to which you can integrate it into the larger environment, and our questions focus on how we can successfully deploy a mixed application development environment. SAP comes with a reputation for superb core development processes, very unlike the rapid application development processes deployed at Celestica. The key has been to link processes and teams using a synthesis of approaches, including business social networking.

In one case, data captured by the customer relationship management application was linked directly to engineering and design data, which allowed Celestica to identify the reasons for an unusually high return rate on a particular product. We were able to identify design improvement opportunities and improve the manufacturing process, which generated savings in the region of $40 million. Our after-market services offering helps to differentiate Celestica in what I would describe as a hyper-competitive industry. To maintain our differential, we highlight Celesticas ability to maintain and manage good inventory performance, which means understanding what customers actually want, as well as analyzing product demand and price changes by region and sales areas. SAP applications give Celestica the ability to take an integrated view right across the global supply chain. Developing new SAP-based solutions Celestica invests continuously in the SAP information management infrastructure in order to generate the insight needed from the accumulated mass of global transaction data. To this end, the company partners with IBM Global Business Services for application development and maintenance (ADM). Celestica was searching for a new strategy to support its global business transformation goals while realizing significant cost reductions in portfolio maintenance and support. The companys specific objectives were to gain cost savings, boost productivity and reduce complexity by having only one vendor for ADM. On that basis, Celestica could build flexibility and responsiveness through a one-to-one partnership relationship that is collaborative, open, and can react quickly to changes in business needs. Finally, close collaboration would lead to thought leadership, through access to professional subject matter experts who can share best practices, strategies and vision, and new methodologies and technologies. Because Celestica interacts directly with the end-users on behalf of its customers and deals with orders, payments, deliveries and product returns, it is able to capture, analyze and share a wealth of information that can be used to refine business processes and customer service. For a large, international business, co-ordinating ADM workload can become timeconsuming. To manage the complex workload, Celestica implemented Rational Team Concert, and deployed Lotus Connections to establish shared team spaces for collaboration. Developing better processes to enhance productivity and reduce costs is essential if Celestica is to achieve its business targets, says Arpad Hevizi. The savings are re-invested in developing additional functionality, forming a virtuous re-investment circle. To make this happen, we need a responsive ADM program. To provide the global resources required to support an international development program, Celestica selected IBM Global Business Services, who proposed the deployment of Rational Team Concert and Lotus Connections. The IBM Global Business Services solution delivers rapid results for Celestica, using a global delivery service that offers round-the-clock response. The approximate workload share is Canada 10 percent, India 88 percent, and Malaysia, Hong Kong and Singapore some 3 percent. Services will be delivered primarily from India by a team of about 100 practitioners,

under Canadian direction. Sharing information globally using Lotus Connections has produced immediate results. For example, a team in Mexico was charged with solving a systems issue on a customers business-critical transaction system. The available archive time window was too short, and data volumes were gradually rising, which affected system performance. With Lotus Connections, the team discovered that Celestica developers in Kladno, Czech Republic, had already solved the issue on a similar customer system. The Mexico and Czech Republic teams collaborated using Lotus Connections, re-using software components and development processes stored in Rational Team Concert. The archive backlog was cured without impacting customer core operations and at a lower cost than re-developing a one-off solution, says Hevizi. Measuring success Celestica measures the performance of all IT projects, including adoption rates and business value creation. These are measured using statistics such as increased revenue following deployment of a new IT service. Before we introduced Rational Team Concert, we worked hard manually to identify key value measures. Celestica wanted to monitor developer productivity, project time, business unit executive participation, adoption rates, and rollout success. Without a shared platform such as Rational Team Concert, it was not possible to ensure that we captured global activities, says Arpad Hevizi. The first step was to establish appropriate communities to make this possible, and IBM Global Business Services recommended Lotus Connections. The rollout was so effective that as soon as we completed the demonstration project, the manufacturing unit managers wanted to adopt it, to enable them to share ideas and best practices. IBM Rational Team Concert is a collaborative development environment providing agile planning, source code management, work item management, build management, and project health, along with integrated reporting and process support. Rational Team Concert connects dispersed development teams, compresses development cycles, and helps to deliver highquality software based on defined processes. The simple user interface encourages the business unit leaders to take ownership of software development projects, setting clear objectives and managing the timelines and resources required. By having aligned goals captured in Rational Team Concert, Celestica is able to focus on the strategic objectives. IBM Global Business Services is responsible for providing the resources and skills base required for ADM, while the business units concentrate on the results. The agreed metrics and commercial targets reflect this partnership, and financial incentives are set on percentages of cost saved on maintenance, says Arpad Hevizi. A true partnership The Celestica partnership with IBM Global Business Services covers all aspects of ADM. Every participant has equal access to the Lotus Connections and Rational Team Concert applications, which track every aspect of performance, from individual developer productivity through to final business adoption rates of new services.

The Digital Reputation Application allows Celesticas IT teams and individuals to self assess their deliverables or outcomes, rapidly creating individual scorecards and metrics that allows the company to more effectively measure its success. The metrics produced are based on software quality, development effort, schedule and re-use of software assets. This information is used to generate positive feedback, to help match developer teams skills more closely with the business demands, and discover which software assets offer genuine, re-usable value. Arpad Hevizi comments, IBM Global Business Services was willing to work with us, sharing business targets and shouldering responsibility for delivering successful projects that add value to Celestica. IBM Global Business Services provides transparency into resources, skills, schedules and performance of individuals, using the built-in metrics available in Rational Team Concert. This truly allows us to treat the IBM ADM service as part of the Celestica team, giving us access to an experienced, innovative and creative account team. For example, in the past the business unit managers had often wanted to buy off-the-shelf software solutions to meet needs such as customer care or after-market care. Although these solutions would not be a perfect business fit, the business unit managers did not have the confidence that an internally developed solution could be delivered or adopted successfully. Now we are so confident of our in-house capabilities, based on Lotus Connections, Rational Team Concert and the IBM Global Business Services team, that we use our internal development program to demonstrate Celesticas software capabilities to customers. With IBMs assistance, we have delivered increased productivity, reduced development times and lowered costs, while experiencing significantly higher user adoption rates, which translate into greater business value. IBM worked to establish a relationship that demonstrated that it was listening and acting to support Celesticas business needs. This One Team approach extended to building the proposal jointly with the client and working through the options to establish the best solution, balancing costs and client needs. Arpad Hevizi concludes, The recipe is to run core operations on SAP applications, and extend the power and reach of the developer community using Rational Team Concert and Lotus Notes Connections. We are able to unlock specific value from SAP with both our own extensions and vendor applications such as business intelligence. Celestica uses business social networking to connect what otherwise are often separate teams. For example, the power of analytics rests on the ability to connect to core data provided by SAP applications, and Lotus Notes creates a common pool of knowledge and accountability. We are continually looking at how we can collaborate with Lotus Notes, Rational Team Concert and SAP to encourage teamwork across different units, all designed to increase business performance. With IBM Global Business Services, not only do we benefit from immediate cost savings and productivity improvements, but it solidifies our place at the leading edge of smarter ADM and provides us with strong competitive differentiation in the industry, with collaboration and working as One Team being the core fundamentals of our success.