Fletcher Challenge picks SAP despite ‘expensive’ reputation

SAP's reputation for large and expensive projects was a disincentive for Fletcher Challenge Forests when evaluating what product to buy to replace its core transaction systems. But when the time came to make the decision in December, the package was chosen, the company confident it can prove the reputation wrong using the accelerated SAP (ASAP) methodology. It aims to implement a new system to support customer service, distribution and inventory management functions for all products, and production in the company's mills and remanufacturing plants in the central North Island. A Fletcher spokesman says the company realises the project - costing about $10 million - is a major undertaking that will take much planning and business commitment.

SAP’s reputation for large and expensive projects was a disincentive for Fletcher Challenge Forests when evaluating what product to buy to replace its core transaction systems.

But when the time came to make the decision in December, the package was chosen, the company confident it can prove the reputation wrong using the accelerated SAP (ASAP) methodology.

It aims to implement a new system to support customer service, distribution and inventory management functions for all products, and production in the company’s mills and remanufacturing plants in the central North Island.

Fletcher Challenge Forests IT manager Blane Evans-Parker says the company realises the project — costing about $10 million — is a major undertaking that will take much planning and business commitment.

“In addition, SAP has a reputation for large and expensive projects that take many years to come to fruition. This is something that both SAP and ourselves intended to dispel by using sound project management and the ASAP methodology.”

ASAP provides tools, templates and examples of best practices to speed up the deployment of SAP’s R/3.

Last year it announced its first customers overseas — mid-size companies — to have pulled off significant R/3 deployments within six months using ASAP.

Fletcher wants an implementation in 15 to 18 months with a licence initially for about 350 users.

It also evaluated other products, and produced a shortlist of SAP, Baan and SSA.

“We did take a lot of notice of it [the reputation for large and expensive projects]. You might say that was the biggest disincentive to go with SAP.”

Evans-Parker says Fletcher eventually chose SAP because it was impressed with business knowledge it had.

The company is confident of meeting deadlines — it can’t afford not to.

“We’re also using this to solve some of our year 2000 problems.”

He says the Asian financial crisis, hurting the forestry industry at present, wouldn’t stop the purchase.

“You can’t let any one particular crisis stop you from a long-term business strategy, and when all is said and done the Korean crisis, even if it’s six months, is relatively short-term — we have a plan to be in business 10, 20, 30 years and this system certainly will have something like a 10-year life span.”

He says Fletcher has signed the deal “hopefully with our eyes completely open”.

“We know what the markets are doing and we’ve done our homework in terms of our numbers.”

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