Diversified agri-business Senwes has extended its ability to provide a more sophisticated service to its broad customer base with the completion of an upgrade from the SAP R/3 to the mySAP ERP 2005 business software application.
At a project cost of only R500 000 and a shortened implementation time of just 3,5 months, Senwes, which handles 25% of South Africa’s commercial grain storage, also undertook the upgrade using its own in-house skills.
Originally an agricultural co-operative, Senwes has transformed itself into a developer of access to markets for agricultural produce, a supplier of input products to agricultural producers, and a provider of commercial storage for 4,6-million tons of grain and oil seeds. It operates 93 business units, including its silo complexes and a series of retail stores through which it provides agricultural implements and machinery as well as input products to customers. Turnover for 2007 was in excess of R5-billion. Profit for the year was R127-million.
“Because we operate in a particularly volatile commodity market, we wanted to ensure that we were on the latest technology platform so that we could roll out more sophisticated financial and management applications over time,” says Senwes chief information officer, Martin van Zyl. “In the process, we’re equipping ourselves to give our customers a more effective service.”
Senwes plans to add functionality to its current capabilities having bedded down the technical upgrade, including corporate financial management and business intelligence coupled with business planning and simulation. “One of our key requirements is to be able to simulate a typical harvesting season, with the ultimate aim of enabling strategic enterprise management – from top management all the way through to more tactical levels of operation. That requires our system to be able to handle more than 2,2Tb of data.
“At the same time, we want to seamlessly integrate futures and options trading into our systems and mySAP ERP has that capability built-in,” says Van Zyl.
Senwes did most of the upgrade itself, using its internal SAP skills.
“We are seeing a growing trend among customers towards taking SAP implementations in-house,” says SAP Africa business development manager in the consumer products and retail sector Lesleigh Seagram. “That’s partly because high-level SAP skills are still in short supply in the broader market. For organisations that are not in the major commercial centres, having in-house skills saves on the cost of consultants’ travel and accommodation."
Upgrade costs can be controlled if you do proper implementation planning and know what your key business requirements are before you start an upgrade. Utilising internal resources is a clever way of cutting costs and building internal competencies at the same time, says Seagram.
Van Zyl agrees: “We needed to use only one external consultant and when it came to patches and advice on the SAP Loans module, which we upgraded to ECC6 for the first time in South Africa. AP Germany was extremely accommodating even though we were not a ramp-up customer. They wrote the patches to meet our specific needs.
"All in all, what we needed was a better ability to adapt to a changing business environment and upgrading SAP was the way to achieve that. There is no doubt that SAP is giving Senwes a competitive advantage in the agricultural sector.”