Landis+Gyr South Africa has become the first of the international group`s subsidiaries and one of the first South African-based companies to enjoy the benefits of the most recent version of the popular SAP enterprise resource planning (ERP) platform thanks to a smooth migration from a previous version by a team of SAP specialists from Spearhead, Siemens and Landis+Gyr.
Spearhead, the SAP consulting division of Bytes Technology Group SA (Pty) Limited, focuses on developing SAP solutions that are tailored to meet the specific needs of different industries by drawing on the skills of industry experts within that industry. This has enabled Spearhead to become the first SAP Partner in SA capable of consistently delivering implementations and projects against fixed price.
The Landis+Gyr project was no exception: the technologically sophisticated project was delivered on time and below budget.
Landis+Gyr South Africa is a leading supplier of revenue management solutions and systems for electricity service providers in the local and international market. Landis+Gyr is at the forefront of electricity metering in the global arena.
According to Vishnu Aurakeasamy, project manager at Landis+Gyr in SA, the global company runs SAP, with the South African operation successfully using version 4.5b of the ERP software. "While the system delivered adequate performance, we sought to upgrade as the support on version 4.5 was coming to an end. We were faced with some options - upgrade to version 4.6c, or opt for the recently released version 4.7," he says.
The company is using core SAP modules including Materials Management, Production Planning, Finance Controlling, Project Systems and Sales and Distribution. Interestingly, although the company has just 40 users in SA, a cost of ownership calculation revealed that SAP was the most cost-effective solution, says Aurakeasamy.
"We conducted a benchmarking exercise looking at alternatives and found that SAP is the most cost-effective solution as we are part of an international group," he adds.
Aurakeasamy explains the decision to select version 4.7: "While the risk was perhaps greater because the technology is so new and experienced consultants were limited in SA, we made a business decision to opt for the latest release as this would save us the expense of upgrading twice. Additionally, we found that 4.7`s extended functionality - notably, better supply chain integration and the Web services structure - would add value to our business. The difference between version 4.5b and 4.7 is that the old version is focused on integration within the organisation, whereas in 4.7 the focus is on collaboration beyond the organisation."
The company engaged Spearhead to scope and execute the project. Selven Naidoo, Spearhead technical project manager, explains that there were concerns that the complexity of the upgrade could have required the intervention of experts from SAP Germany.
"This would have added considerable expense to the project. We therefore decided to go it alone; but we invested time - two full months - and considerable effort into thorough research and planning prior to implementation. It was a lengthy process, but it was worth it," he adds and points out that rushing into implementation can lead to problems further down the line.
"Our experience has shown that careful project planning and exhaustive testing upfront - a methodology that encompasses best practices - eliminates the chances of any surprises," he says.
"Thanks to our planning and our ability to draw on the skills of an industry expert, as well as the commitment and cooperation of the Landis+Gyr management team, we successfully completed the implementation phase in just one week. And we were able to deliver the upgrade at below the expected cost," he adds.
Aurakeasamy notes that within the current tentative economic and general business conditions, corporate expenditures of all types, not just IT, are under a level of scrutiny that virtually nonexistent even 24 months ago. The financial stakes are higher, and there is less room for errors. Every disbursement must be justified and add to company value, or it will not survive business-line manager scrutiny.
As a result of increase investment scrutiny, demonstrable value has emerged as a key theme in today`s IT environment. Business solutions must demonstrate a certain return on investment, usually within an accelerated time period. While ROI can be measured in many different ways, there is no doubt that corporate buying criteria have placed substantial pressure on technology vendors, service providers and partners to quantify the level of business value created by their products, effectively communicate this value to prospects, and then deliver on this value.
"The successful migration to version 4.7 has already delivered significant improvement within our operations. We are seeing the value in terms of a more efficient supply chain, while we now have a solid foundation for extended technological functionality that can improve business management - such as business intelligence and portals. And since the project has been completed below the projected cost, in scope and within the defined period, management is satisfied that its investment in the software is justified and is delivering appropriate value," Aurakeasamy concludes.
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