By Imthishan Giado
After acquiring Western Bakeries in 2007, Almarai had to convert its ERP system from Oracle to SAP in just 104 days – and using only one team to support both companies. Imthishan Giado reports.
After acquiring Western Bakeries in 2007, Almarai had to convert its ERP system from Oracle to SAP in just 104 days – and using only one team to support both companies. Imthishan Giado reports.As IT implementations go, enterprise resource planning (ERP) ones are among the hardest. Not only do they require a deep understanding of the processes and policies that underpin a firm, but successful execution also requires absolute commitment at the boardroom level. This can be a daunting prospect for an organisation and from a project sense it can often be hugely expensive.
The other thing was that there were capable people in the business itself who were willing to take it up. Wherever we had some reluctance, we had to bridge it with some kind of coercion.
So ERP is tough to implement. But few companies made it as difficult for themselves as Saudi Arabia’s Almarai. The dairy company embarked on a plan to convert Jeddah-based acquisition Western Bakeries from its previous Oracle implementation to a SAP-based one in just 104 days – while at the same time maintaining its operations in Jeddah. Amit Chakravarty, SAP application manager for Almarai explains the scale of the task.
“We implemented whatever we have in the mother Almarai company, minus human capital management (HCM) – so finance and control (FICO), materials management and production planning (MMPP), plant maintenance (PM) and business intelligence. They didn’t have a BI system before, they had reporting via Business Objects. We had a lot of work to do in their business process to bring the whole thing into the fold of SAP,” he says.
Western Bakeries was acquired at the close of 2007. Chakravarty and his team went down to Jeddah to examine the firm’s existing business processes in March 2008 and make the preperations for the migration from Oracle to SAP.
“After that, the normal cycle of implementation occurred – so we took about two to three weeks for that. We quickly figured out the to-be processes, and there was other software as well, which was interfacing with Oracle, such as one they had called WAN Man which we had to keep intact. After the to-be process, we went into realisation, unit testing and end-to-end user acceptance testing.”
In March, Chakravarty set the go-live date for the conversion project for August 6 2008 – and Western Bakeries did meet that date. It’s both swift and impressive – when one considers this is an ERP implementation – and he explains the reasons why.
“There are several contributing factors, but two major ones. One is that company’s higher management executive level of understanding of ERP was pretty good. There were one or two people at the top who had a very good level of understanding of what it entails to make an ERP work. The second thing is well, the skill level of my team. A combination of these two factors have made it work,” he recalls.
Chakravarty awards his 22-strong team with the lion’s share of the credit. For the conversion project, he employed six members to oversee it with additional staff on hand to assist during the data migration phase. Three contractors were also brought in from outsourcers Cherry Tech in India for supporting the MM, FI and PP modules – a task Chakravarty could not split among his team because they operated out of Riyadh and needed to support regular Almarai operations.As a result, the Almarai team had to regularly commute between Riyadh and Jeddah for two week stints, always with at least two members stationed at Western Bakeries – a consultant’s life, as Chakravarty puts it. One aspect that was not always welcome is trying to massage the users into understanding the change to a completely different ERP system, but as he remembers, the influence of senior management was a definite bonus.
“People were given a strong message that this is what the company wanted and that key people were needed to participate. The other thing was that there were capable people in the business itself who were willing to take it up. Wherever we had some reluctance, we had to bridge it with some kind of coercion,” states Chakravarty.
After go-live, there were no hiccups because this is a food industry. Delivery, dispatch and shelf life is very important. You can waste product very soon if you do something funny. None of them happened. Honestly speaking, I was anticipating some trouble.
Not everyone, as he recalls, needed to be ‘coerced’: “The guy who is now next to the CFO in that company was the erstwhile CFO when we brought over the company. He and his team went through every GL account, loading the opening balances. In my six to eight implementations that I’ve done, I’ve never seen some team checking all the GL accounts and balances. It was a full scale check – maybe they were convinced as soon as we went live or just before that for the pure reason that we were so high on accuracy and so low in terms of our deviation from normal.”
Of course, the major challenge for Chakravarty was simultaneously overseeing the conversion of the 50 users at Western Bakeries by maintaining his own 570 users at Almarai HQ.
He attempts an explanation of how he balanced the colossal workload: “I wish I had an easy answer. First of all, I don’t believe in going by modules in my team, even though we recruit people by module experience. We do not have ownership by modules, we have ownership by processes. That’s important because if you say procure-to-pay process, then a person who might have an MM background but he is supposed to take the process up to payment. That is one thing which we follow very assiduously,” he declares.
“We’ve got a primary owner and a secondary owner – and mind you, here we are all expats so people have their leaves also, not to talk of personal exigencies. A big user to support and a new company to completely convert and develop? That’s a fine balance, but we did it and we went live at a declared date without even a single reschedule. In fact, we did not miss on any of the declared project dates, none of them,” continues Chakravarty.
It’s certainly rare for the region for a project of this magnitude, and Chakravarty admits that the ease of implementation was unprecedented: “Truthfully speaking, many of the things we did over here were too good to be true. Not one date in the project missed. Within the theme, we had some challenges; one or two processes had to be rejigged, but all within the dates. After go-live, there were no hiccups because this is a food industry. Delivery, dispatch and shelf life is very important. You can waste product very soon if you do something funny. None of them happened. Honestly speaking, I was anticipating some trouble. That’s why I was based out of Jeddah for five more days after go-live just waiting for some trouble to happen. But it didn’t.”
Now that the implementation’s complete, Chakravarty is impressed with the improvements to operations: “The payment processes have been centralised to a great extent. Whenever a M&A takes place, the operational accounts and corporate finance have to be integrated into the mother company – and not to forget, the balance sheet and profit and loss also have to merge with the overall company – and then to be published.
“All of these things have to happen in a very smooth way. To give just one example, they [Western Bakeries] used to have eight days of closure time. We have cut it down to three days. That’s a massive reduction,” he concludes.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.