Blending Tradition and Technology, Illycaffè Produces One-of-a-Kind Coffee
Blog: Oracle BPM
When Francesco Illy opened the doors of his coffee company in Trieste, Italy, in 1933, he had one main goal: to offer the best coffee to the world. To deliver a cup that’s up to Francesco’s standards today, the company has perfected a specific mix of Arabica beans from nine different coffee-growing regions.
The company’s leaders have also worked to maintain the family feeling the founder so enjoyed. The company considers everyone associated with the illy enterprise—from the farmers who grow the beans, to the line workers who grind, blend, and package the coffee, to the baristas who serve illy espresso—part of that family.
From the beginning, the company has had a commitment of “transparency, sustainability, and excellence, and our values are based on these commitments,” says Luca Tiepolo, who serves as both chief information officer and chief human resources officer.
Last year, illycaffè reported record revenues of €483 million, up 3.5% over the previous year, and EBITDA that grew 10.7% on the year.
Customers can buy illy coffee in more than 140 countries, in 259 illy-branded coffee shops, 10,0000 restaurants and retail stores, and packaged for brewing at home. Every day, illy aficionados drink 8 million cups of the brew.
The company attributes its growth in part to its embrace of technology along the way, Tiepolo says. The company holds many patents in coffee production, for such innovations as the design and pressurization of cans that keep coffee fresh, and its invention of individual, premeasured espresso pods.
In 1935, founder Francesco invented the “illetta” espresso machine, which applies steam heat without burning the coffee—the same process widely used in coffee shops today. The founder’s son, Ernesto, who earned a doctoral degree in chemistry, went on to set up the company’s research laboratory, also in Trieste. There, in 1982, scientists created what is now a patented digital sorting machine, which automatically analyzes the shape and color of individual coffee beans. In 1995, the company introduced the “X1,” a stylish espresso machine engineered for home use under the guidance of the founder’s grandson, Franceso.
illy’s founder hoped his new company could retain the “feeling of family” long after he passed his leadership mantle to the next generation. To promote that family feeling among the 1,300 employees now working for illy across the world, the company also needed new technology, to help it standardize HR programs in all locations, Tiepolo says.
The company uses Oracle Human Capital Management (HCM) Cloud because it helps the HR team offer standard pay and benefits packages across geographies, identify talented employees to staff its new locations, and gives managers a single source of detailed information about each member of its growing family.
“Now that we can track the people and roles inside our organization, we can offer to enrich our people’s skills and develop a career path for each of them,” Tiepolo says. “We are using the system as an enabler, to implement our strategies and our processes and to have an engaged workforce.”
Relying more on cloud-based applications lets the company adopt technology faster, and get more out of it. “It allows us to put more energy and time into obtaining value from the system rather than spending time maintaining the technical aspects,” he says.
The application’s recruiting functions help the company attract and retain the best employees, so that the company can meet the ultimate goal of its HR program—“to always have the right people in the right place at the right moment,” Tiepolo says. The company looks for recruits with something Tiepolo calls the “illy factor,” that hard-to-define “passion and deep attachment of our employees to the company.”
Tiepolo has that passion himself, which he feels while enjoying his daily cup of illy espresso—no sugar, in a warm cup, a little cream on top. A cup of espresso, he says, gives him an appreciation for “special flavors”—in coffee and in life—and leaves him energized for whatever challenges the workday ahead may hold.
Investing in People
In support of continuing career development, illy partnered with educational institutions and industry organizations to develop a graduate-level course of study in the sustainable production of coffee. Students can earn a master’s degree in coffee economics and science by completing the course of study, done in collaboration with the universities of Udine and Trieste.
The founder of illycaffè also was deeply interested in the sustainability of healthy coffee crops. He set up programs that continue today where illy coffee experts consult with their growers to improve their crop yield and profitability. And illy recognizes its best growers for their sustainable agricultural techniques with a cash prize and, since 1991, the company has distributed $2 million.
When illy replaced its product-oriented, ecommerce website with a site focused on a more customer-oriented ecommerce experience, it boosted company revenue by 24% during the first 18 months. The company expects its new website to attract even more attention once it adds a chatbot built with Oracle Digital Assistant technology. Tiepolo expects illy’s most digitally savvy customers will enjoy texting their questions about product features, availability, and pricing to the chatbot through a portal in the website. Human customer service agents will take any questions the chatbot can’t answer.
Tiepolo points out that with people drinking 8 million cups of illy coffee each day, the company has the opportunity to either delight—or disappoint—them with each cup. And so it has turned to the Responsys module of Oracle Customer Experience (CX) to help with that challenge.
Responsys captures details of customer interactions across all channels, including chatbot and in-person conversations and email, and summarizes that feedback so that company managers can respond accordingly. With that data, for example, illy marketers can personalize marketing messages to intended audiences across multiple channels, including email, search, and mobile.
Tiepolo looks forward to many more innovations as the company evolves. He says the future looks bright, as illy’s extended family continues to both honor its traditions and embrace new technology.