When an upgrade may be enough

A company whose livelihood is selling computer products is advising caution before tossing out the old and replacing it with the new.

A company whose livelihood is selling computer products is advising caution before tossing out the old and replacing it with the new.

Auckland-based Tech Pacific, the country’s biggest IT distributor, has found a way round a costly resource management system-replacement by breathing new life into its existing system. Managing director Tony Butler says the lesson to be learnt is to thoroughly investigate upgrade options before buying new.

A year ago the IT distributor pulled out of a $138 million deal involving its Dutch parent company, Hagemayer, to install Movex enterprise software from Swedish company Intentia and create a global business-to-business distribution system.

Hagemeyer had said the implementation would streamline distribution, reduce processing costs in the supply chain and increase services to customers. The Asia-Pacific component would have been piloted in New Zealand, then rolled out to 2700 users across Australia, Hong Kong, India, Malaysia, the Philippines, Singapore and Thailand.

But as the project reached the design and implementation stage last October, Tech Pacific called off its multimillion-dollar share of the project, citing the global downturn in IT spending, and decided to upgrade its legacy ERP (enterprise resource planning) system instead.

Butler says Tech Pacific’s ERP system had initially been developed in Pick in 1984 and was ported to UniVerse 10 years later. UniVerse has since been bought by IBM, which has pledged further support for the database and released version 10.

Tech Pacific was to adopt Movex because it needed an ERP system which could handle modern communications, which meant supporting XML.

While Tech Pacific’s version of UniVerse could not support XML, version 10 could, so a switch to an entirely new product was no longer needed.

“Once you have identified the key driver of why you are moving, research like crazy as to whether you can use your old system. If you see you can, then you might as well spend money fixing the one thing that’s wrong rather than changing everything. That’s the mistake we [initially] made. We had not really recognised that was possible,” Butler says.

Most of the Hagemeyer company lacked existing platforms and wanted many new features, he says. Tech Pacific NZ, though, only needed a few additional features.

Movex, developed from a traditional ERP system, includes applications for customer relationship management and supply chain management. Already implemented by Hagemeyer in some countries, Movex is working well, Butler believes.

Here, Tech Pacific’s legacy system was further developed to handle XML, and gained modules for warehouse management, licensing, process returns, returns to suppliers and claims modules.

The company’s development centre in India is now working on a new warehouse management system, refining its ordering system and revamping the TechLink website, currently in beta testing. The reseller-only site claims to trade $100 million of business a year.

Tech Pacific is looking at CRM systems for the legacy system, but is awaiting a Microsoft product presently in alpha mode, before making a decision about which product to buy.