Five-year digital transformation partnership signed with dairy co-operative Fonterra

Microsoft New Zealand has announced the signing of a new strategic partnership with Fonterra that will see the dairy co-operative migrate many mission-critical operations to Microsoft Azure to support its global growth plans. Once Microsoft’s New Zealand datacenter region is launched, Fonterra will also benefit from real-time business intelligence and exponentially greater capacity to innovate with cutting-edge technologies.

Fonterra is a New Zealand dairy co-operative, which exports products to over 140 countries.

“To meet our strategic goals, which are enabled by efficiency, innovation and sustainability, we look to build strong partnerships with great companies to drive enhanced productivity and efficiency across the business. Microsoft is one of our key partners in helping us deliver our digital transformation, said Piers Shore, Fonterra’s Chief Information Officer.

“The Microsoft Partnership forms part of a wider set of strategic partnerships between Fonterra, Microsoft, EY, SAP, and HCL focused on fundamentally reshaping how Fonterra delivers IT. The cost savings and investment in Fonterra from our strategic partners are a major benefit to Fonterra, but the deep relationships between our organisations are the real win here.”

Transferring data from on-site datacenters to Microsoft’s virtually unlimited Azure cloud platform will vastly increase the amount of data Fonterra can gather and analyse in real time, using everything from IoT sensors on farm milk vats to smart machines in its factories to help optimise its operations. Already, Fonterra is trialling machine learning to detect improperly sealed or faulty bags of powdered milk in its factories, so all products arrive at stores in perfect condition without wastage.

“The new platform aims to bring together all parts of Fonterra and build a culture around data. By capturing and integrating data across the organisation, this will create a foundation for actionable insight and enable Fonterra to deepen our relationships with farmers and customers, optimise our supply chain and manufacturing operations and deliver better products and services,” Shore said.

Fonterra’s Chief Operating Officer, Fraser Whineray, said Fonterra’s strong sustainability focus was an important part of the move to Microsoft’s cloud platform.

“By shifting to a technology platform that will enable Fonterra to maximise its efficiency while using renewable resources, we’re also building on our sustainability commitments. Microsoft’s pledge to use only renewable energy in its datacenters aligns with our own long-term goals and provided another benefit to the partnership.”

Vanessa Sorenson, Managing Director of Microsoft New Zealand, said the faster pace of innovation, greater sustainability and cost savings enabled by cloud technologies are just a fraction of the significant benefits our agrifood sector is poised to gain from digital investment.

“Watch this space. This is the first customer signing of many. When we disclosed the launch of the New Zealand datacenter region, we knew there would be an appetite for the scope and solutions that it would provide to unlock innovation across so many industries.

And it’s such a privilege to have Fonterra as our first major anchor tenant customer. By helping Fonterra connect better with customers and partners globally, this partnership is not just a tremendous step forward for Fonterra and Microsoft, it also helps build and cement our country’s ongoing success on the world stage. We’re not only excited at the opportunity to support Fonterra to grow and achieve more as a business, but at how this will demonstrate how we can achieve greater efficiency, innovation and sustainability across New Zealand’s entire agrifood network.”

Fonterra’s employee experience and business resilience are also set to benefit from the five-year partnership. Even before the recent COVID-19 disruption, organisations have recognised the need to become modern workplaces, enabling mobile, flexible working and remote service delivery. Under the agreement, Microsoft Surface devices will be provided to key Fonterra staff across Australia and New Zealand to support business continuity and collaboration across its diverse network of 19,000 staff and 10,000 farmers.