Engen solves Y2K problems with first wave of multi-million rand it project

Johannesburg, 09 Dec 1999

Petroleum products company Engen has gone live with the first wave of Project Millennium, a multi-million rand revamp of its information systems designed to solve its Year 2000 problems, achieve operational excellence and improve customer service.

Project Millennium involves a wholesale re-engineering of the company`s business processes through the implementation of seven different software suites integrated with eight modules of SAP`s R/3 Enterprise Resource Planning (ERP) system. While Engen declines to reveal the total amount it is spending on the revamp, project manager Kevin Sheel acknowledges that it large sum which comprehends all aspects including change management.

The project is being implemented in two waves. Wave 1 affects Engen`s manufacturing centres - both its refinery and lubrication products plant.

Wave 2 will cover the rest of the organisation, affecting mainly marketing but also corporate operations.

"By concentrating on the manufacturing systems first, we would be dealing with some of the Y2K issues," says Sheel "Our marketing systems are already Y2K-compliant so that was not an issue."

Big Five accounting firm Ernst & Young, which had been contracted to provide consulting services, subcontracted SAP R/3 consulting services to joint-venture company Ernst & Young CSI, which it owns together with CSIPER Consulting, a South African company with a global presence in the ERP implementation and integration market.

The conceptual-design and solution-development phases for the R/3 implementation were completed and began testing early this year. Wave 1 has now gone live at three locations - Engen`s Cape Town head office, its refinery in Durban and its Grease Blend plant in Chamdor, Krugersdorp.

"The cut-over went extremely smoothly, which can be attributed largely to intensive integration testing," says Ernst & Young CSI project manager Jan Jurgens. "This phase of the project encompassed data conversion, interface and application testing using an automated test tool. In the run up to `go-live` meetings were held every second day to keep personnel informed of the project status and reveal any potential issues or pitfalls."

Engen`s Sheel says he is satisfied with the project`s progress, though he is cautious to describe it as successful at this stage -"it`s for the users to make that judgment," he says. However, he acknowledges that it has gone better than expected and the `go-live` can be considered a success. But, on an objective level, Engen is measuring four different metrics on which to base an assessment of the project`s success. "We will be able to determine properly how successful the project is as a whole only next year."

Meanwhile, work goes on and the project team is involved in solution definition for Wave 2.

"What is important to Engen," says Sheel, "is to simplify business processes and streamline aspects of our business and these must work properly from the word go. We cannot afford to implement something and get it right only in another two years. We have to get it right from the start, or as nearly right as possible with only the minimum of re-working. Ultimately, it must result in improved customer services."

By any standard this is a large and complex project, involving as it does high level of integration, data transfer and the co-ordination of 500 active users in Wave 1 and a further 1500 for Wave 2, all of whom have to be trained.

In every major project there are stresses, but Sheel remains complimentary about consulting firms and their staff. "I am happy that they were selected; they have very good people," he says. "They handled the issues that arose very well. We always want the best expertise and they tried hard to ensure that our requirements were met with a high degree of satisfaction."

CSIPER Consulting CEO Hans Visser says the teamwork had included remote support from his company`s consultants throughout the country. "Many hours of extra work have been put into this project, and it is gratifying that this very important implementation has been brought in smoothly."