LEGO: Building the IT blueprints for business growth

To read a Danish version of this case study, click here.

Designed for Data
Sales data from multiple channels around the world are consolidated and analyzed to improve production planning and forecasting.

Tuned to the Task
All LEGO data is secured with advanced high availability, backup, archive and disaster recovery technology, meeting international regulatory standards and controlling business risk.

Managed in the Cloud
Designed and built an IT infrastructure that enables rapid development of new markets and products. Employs a cookbook approach to rapidly deploying new workloads.

Driving Innovation
Worked with IBM to design and implement a private cloud platform based on consolidation, virtualization and standardization technologies. Transformed IT from an inhibitor of business to an accelerator of growth and innovation.

LEGO Company is one of the world’s leading manufacturers of play materials for children. With revenues of USD1.57 billion, the company employs an estimated 8,000 people around the world.

Securing the foundation for innovation and growth
When increased competition from online and similar digital toys and games combined with already fierce competition in its more traditional retail markets, LEGO—a privately owned and family-run business—boldly reshaped its corporate strategy and transformed its culture to focus aggressively on innovation. Following this strategy, the company has rapidly introduced new products, LEGO Games Systems, and signed agreements with Lucasfilm^® for LEGO Star Wars^® characters, as well as new channels to market. Among LEGO’s business needs were rapid product development, scalable operations for new retail stores and manufacturing plants and always-on logistics to manage international manufacturing and distribution.

Designing the building blocks of an integrated infrastructure
To support this new business strategy, LEGO turned to IBM for help in transforming its IT infrastructure from a mix of legacy systems and applications to an integrated, agile platform for supporting business growth. Working with IBM on a multi-year, phased approach, LEGO consolidated its enterprise infrastructure to dual datacenters that now support all the company’s business applications, across all its global locations, through a matrix of server, operating system, network and storage services.

Esben Viskum, Senior Director, LEGO Service Center, says, “Integration really makes a difference to the way we can go to market. We have one copy of the data, one system, running in the background. All prices, costs and manufacturing, and all campaigns and initiatives are driven the same way from the same data for all countries.”

Increasing market velocity through automation technology
Consolidation and standardization in the data center also enabled LEGO to automate critical business processes. For example, now data from different company locations, as well as from the company’s suppliers and retailers, is automatically transferred to the company’s main system and analyzed, significantly improving production planning and forecasting across its manufacturing sites in Denmark, Czech Republic, Hungary and Mexico.

Securing the alignment of business and IT strategy
Making sure LEGO was empowered to manage and control its new infrastructure was vital to the success and sustainability of its IT transformation. To create an appropriate level of governance, LEGO established clear processes to document its business strategy and requirements through relationship managers who read unit business plans and convert them into an IT business case. Once implemented, the IT department provides the services and measures the results, enabling LEGO to rapidly respond to changing requirements. Additionally, all LEGO data is secured with advanced high availability, backup, archive and disaster recovery technology, meeting international regulatory standards and controlling business risk.

Making private cloud fully operational
LEGO’s IT infrastructure has freed IT from becoming a bottleneck to business growth. Using IBM and third-party solutions, LEGO has created a private cloud platform on which each application is allocated the processor, memory, network and storage resources required to deliver the necessary business service levels. Individual physical servers can be added, upgraded or retired without interrupting the service delivery.

For example, during peak seasonal sales periods, web applications are allocated additional application servers from the cloud resources with no procurement, configuration or deployment delay. After the peak has passed, the resources are released and made available for use as needed by other workloads, optimizing efficiency and increasing operational agility.

Putting IT at the service of business
Transforming its IT infrastructure to support an agile business strategy is reaping significant rewards for LEGO, helping fuel a 22 percent increase in business. LEGO estimates that, based on its technology investments of USD45 million, made to simplify and streamline applications and infrastructure, it will realize business benefits worth some USD150 million.

By consolidating and integrating, LEGO has simplified and streamlined data and processes across its operations around the world. Consolidation has also enabled investment in areas such as data governance, security, management and control. LEGO is also achieving very high resource utilization through virtualization technologies. And a template approach is enabling IT to deploy new workloads quickly, starting small and growing fast.

According to Viskum, “Due to the architecture and design of the cloud-based LEGO Matrix, IT is not a bottleneck on growth. When the executives make the decision to open a new office or shop, we have a template for rollout that we can apply to the solution, ensuring that we have the right total cloud capacity, and the IT services are ready and waiting.”