Dulux changes ERP system - aSAP

Leading South African paint producer, Dulux, had an urgent requirement to streamline its IT operations when it recently re-engineered its business to form two operating units.

According to Dulux Project Manager, Brian Holt, the mainframe system in use was an over-expenditure given the reduced size of the business unit. "Our relationship with EDS allows us to scale both up or, as happened in this case, down to accommodate our business requirements, and to migrate to a new version of SAP very quickly indeed. This is one of the primary expectations of outsourcing - overheads that don`t form part of your core business become far more flexible and easier to manage."

According to EDS Enterprise Solutions Acting MD, Luca Wildt, the rollout of SAP R/3 at Dulux`s Alrode operation in Gauteng took six months, instead of the usual nine to fifteen that implementations of this nature demand. Says Holt: "This meant we were able to feel the benefits of the implementation far sooner than we might have expected, and reduce over-expenditure on IT infrastructure as soon as possible."

At the same time as the ERP system was being implemented at Dulux, SAPSA implemented the SAP CRM module. EDS worked closely with SAPSA and will be responsible for the ongoing integration and support of the CRM. This is one of the first CRM implementations in South Africa and could have a major impact on the way Dulux services its clients.

Wildt points out that at very little added cost, Dulux has been moved onto a high quality platform that is best suited to the size of the business. This paves the way for additional elements that will better serve the customer (CRM), to be implemented to optimise the supply chain and enhance management information for superior decision making.

According to Wildt, the costing is another innovative aspect of the deal. "The project is costed on a fixed price basis, and is being paid for out of the cost savings obtained from the lower infrastructure costs to Dulux over the remainder of the contract," he explains. "The cost saving covers both implementation and hardware costs, and the fixed price costing meant the client`s risk was kept minimal."

Wildt says the fact that EDS was willing to commit to a project with no incremental revenue, but significant added value to the client, demonstrates a focus on customer needs. "The project was very quick by SAP standards, and the client is delighted with the result. That`s what matters to us."

EDS Africa chairman, Michael Minassian, believes EDS has developed over many years unique processes which bring added value to its clients by focusing on the essential benefits to the client. "This project has demonstrated our ability to deliver high quality, rapid, cost effective SAP R/3 implementations, to support the full lifecycle support for SAP solutions, from selection, through to implementation and ongoing support. It also proves our ability to provide low-cost SAP implementations to smaller clients," he states. "And while others focus either on SAP implementations or generic outsourcing, EDS is able to offer end-to-end outsourced SAP solutions."

Wildt believes the project has demonstrated that SAP R/3 can be implemented rapidly and at a reasonable cost. "This may enable companies who might previously have considered themselves too small to contemplate SAP," he says. "This project also emphasises that, with a phased approach, value can be unlocked more quickly, and the project has a lesser impact on the bottom line."

Dulux first outsourced its IT to EDS in 1995, and the scope of the relationship includes its ERP system, LANs, WANs, desktop support, servers and other systems.