Ingram Micro Inc.’s push into higher-margin business lines, namely mobility and the cloud, were spearheaded by Chief Executive Alain Monie, who took over the top post more than two years ago.
The ultimate success of the ongoing shift lies in synchronizing technology infrastructure that crosses 36 countries and five continents with the distribution giant’s sprawling workforce that supports that network—a responsibility that falls squarely on the shoulders of new Chief Information Officer Ernie Park.
“We have an opportunity to really leverage what we have built and take it to the next level,” Park said during a recent meeting at the company’s Santa Ana headquarters.
Daunting Task
The company hired the 30-year industry veteran late last year to develop a global IT template for Ingram Micro, a daunting task he took on and completed in his previous role as CIO for 3M Corp.
Park laid out the blueprints for standardizing business processes and integrating complex units at the St. Paul, Minn.-based industrial products maker in an initiative that encompassed more than 75 countries.
“I was brought in to transform the IT function there,” said Park, who was the first CIO 3M hired from outside the company. “I started that journey about four or five years ago, and now they’re well into their transformation.”
Park led a team of 2,000 employees and some 1,000 contractors at 3M, which posted $30.8 billion in sales and $4.6 billion in profits last year.
He will oversee about 1,200 workers and a few hundred contractors at Ingram Micro.
“One of the opportunities we have is bringing all these people together under one corporate function so we can leverage capabilities,” he said.
In the past, each region worked on its own initiatives, such as customer relationship management or CRM processes that had often been redundant, crimping efficiency in a segment where every penny counts.
“Rather than having them work on their own initiatives, we’re basically bringing them in to work on a common initiative so they will come up with better solutions that meet everyone’s needs,” Park said.
He said it was difficult to leave 3M after a nearly six-year stint, but he was ultimately swayed by Monie’s vision of diversification.
An executive search firm contacted Park in October, and talks intensified shortly thereafter. He joined Ingram in December, replacing interim CIO Nimesh Dave, who resumed his role as executive vice president of global business process and cloud computing.
Mario Leone, who served in the CIO role from January 2009 to February 2013, left the company to pursue his own interests, Ingram Micro said.
Leone is managing director of Huntington Beach startup Apri Technology Partners and chief operating officer of Irvine-based startup DocVerify Inc. He also teaches business classes at Chapman University in Orange.
New Horizons
Ingram’s entry into new growth markets, fueled by its $840 million buy of Indianapolis-based wholesale distributor BrightPoint Inc. in late 2012, required it to change its old-line distribution model that had served it well for more than three decades. Now it’s adding services that supplement the distribution.
BrightPoint, which added $4.5 billion in revenue to Ingram Micro’s top line last year, competes with Miami-based Brightstar Corp. for the title of the world’s largest wireless device distributor.
“One of the challenges we have is to bring a different focus on the business model,” Park said. “Ingram used to operate as a geographically focused, single line of business.”
The cloud, mobility and other added services erased those boundaries. BrightPoint, which has operations in 24 countries and a customer base of more than 25,000 companies, strengthened Ingram Micro’s offerings in activations, repairs, and logistics for smartphones, tablets and other devices.
Ingram’s stable of resellers now provide tech support and numerous cloud applications that allow customers to use products when needed.
“This diversifies the business portfolio into more profitable solutions and services,” Park said.
That’s what executives have zeroed in on since Monie’s arrival at Ingram Micro, the world’s biggest distributor of computers, software, and other technology products, with revenue last year of $42.6 billion and profits of $310 million.
The company has operated on razor-thin margins for decades, but that dynamic is gradually changing with the new business lines.
One System
Park has been busy traveling since he joined the company, meeting with regional leaders in Europe, the Asia-Pacific region and Latin America. He’s spent time with key customers, including Apple Inc. executives, at Ingram Micro’s Singapore hub.
The overall goal is to more closely align the business and Ingram Micro’s IT infrastructure, or what the company calls information systems, to drive profits.
“I think they’ve done some level of globalization but haven’t taken it through the final stage,” Park said.
A major operational glitch in installing SAP-based enterprise software that first surfaced in early 2011 in Australia stalled the overhaul.
Problems with the electronic logistics system, designed to improve automation of services for customers and vendors, hampered earnings for years. The multiyear campaign to regain profitability and customers in Australia appears to now be in the rearview mirror.
“I was just in Australia a few weeks ago, and they seemed to be doing fine,” Park said. “I’m confident that in the long term, running the company entirely on SAP will drive further benefits.”
The overhaul has been completed in nine countries, a quarter of Ingram Micro’s operations. Major improvements are expected in the next 12 to 18 months.
“We have a long way to go,” Park said. “We will be busy for the next three to five years.”
