Absa will implement SAP`s enterprise resource planning (ERP) solution over a five-year period at a cost of more than R300 million.
Absa group executive Leon du Rand says Absa`s Group Investment Committee (GIC) approved the SAP deployment in principle last week and the first phase of seven phases will begin in February.
"The first phase will be the defining stage and will run for about six months. The GIC has approved R26 million for this phase and a review will be conducted before more funds are approved for the second phase of the project."
Du Rand says the first phase of the implementation will include the evaluation of strategic direction outcomes, refining the business case, defining service offerings, an integrated conceptual design, the design and development of the enterprise architecture and a capacity and impact analysis.
He says the flight plan for the ERP implementation will also have to be confirmed in the first six months. This will include work streams looking at compliance with general accepted accounting practices and the International Accounting Standard (IAS), Basel II, management accounting, procurement, real estate requirements, architecture enablement and common financial language.
"The implementation will include a traditional ERP implementation with procurement, property and finance modules. It will also include SAP`s Bank Analyser, which will satisfy Basel II and IAS requirements, as well as the sourcing of information from traditional core banking systems. The third portion will be the Absa Vehicle and Asset Finance implementation, which began in October," he says.
The bank has to date used IBM Consulting and Accenture, which has consulted on Absa`s strategy for an ERP implementation. Du Rand says other implementation partners still have to be decided and it is most likely a consortium will be appointed.
"The consortium will include IBM and Accenture, however, it could also include other implementation partners. It will be given guidelines on spending and the skills base that needs to be used. The consortium will work closely with Absa IT in integrating the ERP system with Absa`s core banking and financial systems and methodologies," he says.
Short-term benefits include standardisation and having one software package. However, Du Rand says the real benefits of the implementation will only be seen after a four-year period. These include improved efficiency, flexibility, improved maintenance, fewer interfaces and applications, and compliance with regulatory issues.
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