The Lesotho Highlands Development Authority (LHDA), responsible for the construction and operation of all Lesotho parts of the Lesotho Highlands Water Project - currently the largest water project in the world - has opted to implement the SAP R/3 business application software incorporating accounting, controlling, financial assets, assets management, materials management, treasury and payroll modules. The project has been code-named 'Katleho', which, when translated from Sesotho, means 'Success'.
LHDA has chosen to take the 'big bang' approach, and is due to go live in June 1998. Richard Grimmett, LHDA Head of Development, explains that the company needed to replace its financial and treasury system, which had become obsolete owing to rapid growth and changing business requirements within the organisation.
"Our treasury system looks after the fund-raising and administration of international loans, which were arranged by Lesotho in 1986 before the South African elections. As this is the basis of the company and its projects, it is of great concern to LHDA that our treasury requirements are flexible and can change with the company.
"The projected contract is worth approximately R6,36 million, with SAP Southern Africa comfortably winning the software section, as it was the only company to offer an integrated solution which includes the required financial, logistics, human resources and treasury management functionalities. This integration will allow the company to re-engineer many of its processes and get rid of any non value added activities. This will allow management to produce timely, accurate information at any stage."
Refiloe Lehohla, LHDA IS manager, explains that the company is also considering adding the R/3 plant maintenance module to the list. "Phase 1a of our project, which is the building of the Katse Dam and water tunnels to South Africa, is nearing completion with water delivery to South Africa scheduled to start in early 1998.
Currently, we are completing the 'Muela Hydropower Plant, which is set to be operational in August 1998, and are about to begin Phase 1B, with the construction of the Mohale Dam and connecting tunnels. The implementation of R/3 plant maintenance will enable LHDA to track and allocate operation and maintenance costs and fully exploit the breadth and power of the new system.
"We have also managed to kill two birds with one stone with regard to a potential Year 2000 disaster, as our previous system was not Year 2000 compliant," she says. Paul Wray, SAP Southern Africa Account Executive, points out that because of the remoteness of the region, LHDA has previously encountered severe support shortages, restricted to the aid of one company.
"Over the forthcoming years, SAP Southern Africa and its business partners will be dedicated to minimising this risk, which is a critical concern for a remote company.
"SAP Southern Africa and its business partner, Price Waterhouse, will be responsible for the analysis, design, construction and implementation of the R/3 project. The design and construction of the installation are to take place over approximately six months in Johannesburg.
"The project will be driven mainly by SAP Southern Africa, as the LHDA workload only allows for three users to have a full-time involvement. Fortunately, the Compaq hardware will be running in a Windows NT environment, which means that very little technical training will be required," he concludes.
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