Macsteel International chose Iserve to implement its comprehensive customised version of mySAP.com within a global platform.
Macsteel International, which inter alia, exports Iscor steel, exists as an international and local trading business. It is the result of a joint venture between Macsteel Holdings, a large private company in SA, and Iscor. With a presence on almost every continent (hubs exist in North America, Australasia, Asia, Hong Kong, UK and SA), the turnover size and the complexity of business transactions of the organisation warranted a review of their global IT systems.
"There was a loose association in terms of IT," commented Phil Hall, CIO at Macsteel International. "Although there was high-volume communication in terms of voice, fax and e-mail, each hub had a different IT system. This resulted in the slow accumulation of business management information and a headache for the group`s CFO. Investigations showed legacy systems that were simple, disparate and non-coordinated and my objective was to build a global business platform."
"Macsteel urgently needed one operational system," explained Brett Graham, Project Manager at Iserve. "Since there are often two hubs involved in any given contract, with 6 000 to 8 000 complex contracts yearly and intricate pricing systems, an IT vehicle was needed to communicate, manage and deal with the complications of these contracts."
"The IT system had to account for profitability within a foreign exchange environment, offer support documentation, as well as account for all financial aspects," explained Hall. "Currency conversion is key as Macsteel International operates in multi-currencies. The system also needed to operate within any market globally, as well as deal with the complexities of import-export documentation. Scalability and flexibility were also paramount. Macsteel Holdings has various subsidiaries and the chosen system needed to be flexible to enable implementation into the other arms of the business if required."
Deloitte and Touche were contracted to sketch out the business requirements and once completed, an exhaustive selection process resulted in the purchasing of mySAP.com.
"The solution is comprehensive, meets our business needs and is the most cost-effective," added Hall.
"Iserve, a specialised SAP consulting business and a national service partner of SAP (Africa), was chosen as our implementation partner. They had demonstrated their extensive capabilities in a similar implementation within the glass industry. They were also more cost-effective, yet offered equivalent if not superior services to their competitors."
The customisation and configuration of SAP R3 were started in July 2002 and in April 2003 implementation began. Three of the global hubs (SA, Europe and the Far East) are now running on SAP with North America to go live later this year and Australasia scheduled for 2004.
SAP New Dimension products are being installed. These strategic enterprise management products incorporate business warehousing, business consolidation systems and business planning systems. "Not only is this one of the first global implementations of this particular product suite, but the entire consolidation and customisation process is probably one of the most complex that SAP has ever seen," continued Hall.
"A fairly unique aspect to this project was the change management approach. We first had to implement an IT global platform with a multitude of variations and only then could we focus on change management. Although this isn`t traditional, the implementation would never have occurred if we first attempted to rationalise each trader`s specific non-standard processes. A positive outcome has been the standardisation of processes, exactly what the company needed.
"The implementation, even without the rationalisation process, has altered the company as it has changed the business from a decentralised mode to a centralised operation. This is all about improving processes and creating a truly global company. We envision a two-year roll-out plan. Macsteel International now uses SAP version 4.6c, including customised product solutions from the mill industry solution packages. This includes basic ERP modules normal to R3 implementation, as well as the New Dimension products."
"This is an extremely complex implementation," added Graham of Iserve. "In order to make SAP compatible with a global trading environment, customisation was imperative. A particular success was the ability for Macsteel International to deal with double their usual tonnage yet maintain the same complement of staff during the go-live stages."
"As we are still in the implementation process, there are a number of benefits still to be realised," concluded Hall. "However, streamlining has already begun. Through scoping and implementation, a legion of unshared and duplicated business documents and processes have been discovered. Although still in the development phase at this point in time, the territories that have finalised on implementation will in due course have access to real-time business information and an accurate composite view of their business. Within SA, we are planning to realise the benefits of a seamless interface between Iscor and Macsteel International since Iscor runs on SAP. However, the real rationalisation will take place in 2004, where Macsteel International as an international company will truly gain a better understanding of markets and penetration in a real-time dynamic manner."
For further information, please contact Cassie Lessing: telephone (011) 258 7800; fax (011) 258 7888; e-mail cassiel@erpcom.co.za.
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