Röchling Automotive uses funding from IBM Global Financing to enable R&D transformation

Published on 02-Jun-2010

"We made the organisational change, but we still needed to standardise the IT landscape. The centres at Worms and Bolzano were using separate document and project management systems, and there were also a lot of documents on local file servers at different plants. We started looking for a new platform that would align better with our global R&D strategy." - Thomas Fütterer, Head of Administration at Röchling Automotive.

Customer:
Röchling Automotive

Industry:
Automotive

Deployment country:
Germany

Solution:
IGF, IGF: IT Financing - IBM HW, IGF: IT Financing - IBM SW

IBM Business Partner:
UBL

Overview

Based in Mannheim, Germany, Röchling Automotive is a global partner for many of the world’s leading automotive companies. It supplies systems and components for the engine compartment, the chassis and the interior of passenger cars and trucks. The group employs 3,000 people, and contributes about half of the Röchling Group’s annual sales revenue.

Business need:
Röchling Automotive is standardising its R&D processes, consolidating all project management and documentation into a single SAP cProjects system. Rather than divert cash from production operations to fund this important project, the company looked for other sources of funding.

Solution:
UBL, an IBM Business Partner, helped Röchling Automotive negotiate funding with IBM Global Financing: a three-stage, multi-million Euro contract covering IBM hardware, SAP software licences and implementation services, with payments optimised over a 39-month term.

Benefits:
-- As a technology vendor, IBM had a perspective that went beyond an assessment of the cash required and could offer the most favourable terms -- IBM provides all hardware, software and services at a single rate of repayment, which simplified budget management -- The lease that was negotiated freed cash for Röchling Automotive to invest in other projects

Case Study

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Based in Mannheim, Germany, Röchling Automotive is a global partner for many of the world’s leading automotive companies. It supplies systems and components for the engine compartment, the chassis and the interior of passenger cars and trucks. The group employs 3,000 people, and contributes about half of the Röchling Group’s annual sales revenue.

The automotive industry demands continual technical innovation from its suppliers, so Röchling Automotive is strongly commited to research and development (R&D). To streamline these processes, a decision was taken to consolidate all corporate R&D processes in one global system.

“We made the organisational change, but we still needed to standardise the IT landscape,” explains Thomas Fütterer, Head of Administration at Röchling Automotive. “The centres at Worms and Bolzano were using separate document and project management systems, and there were also a lot of documents on local file servers at different plants. We started looking for a new platform that would align better with our global R&D strategy.”

After evaluating several options, the company decided to build a solution using the cProjects application from SAP. This would be integrated with Röchling Automotive’s other SAP applications and with its CATIA product lifecycle management system. The solution would run on new IBM Power 550 and IBM System x3850 servers, with an IBM System Storage TS3200 tape library for backups.

“The other solutions we considered focused mainly on the technical aspects of project management, but were weak on the controlling, accounting and financial aspects,” says Thomas Fütterer. “By contrast, this was a major strength of the SAP solution.”

Having chosen the software and hardware, the company needed to decide on the most opportune time to start the project.

“Finally, in 2009 we came to a period where R&D would have resource available to start the project—but the general economic climate meant that it was not the right time to make a large capital investment in new IT,” explains Thomas Fütterer. “We asked our partner UBL for help, and they suggested that we should approach IBM Global Financing.”

UBL, an IBM Premier Business Partner, introduced Röchling Automotive to IBM Global Financing. Together, the companies worked out a proposal for a sale and lease back arrangement that would include both the IBM hardware and the SAP software.

“We are a traditional German company in the sense that we are quite conservative in financial matters,” says Thomas Fütterer. “So for this leasing agreement, trust was a key issue. We asked several other companies for proposals, but the IBM offer worked out better for us—both in financial terms, and because we trust IBM as a long-term partner. Moreover, we felt that IBM’s technology sector expertise gave them the edge over non-specialist credit providers.”

According to the terms of the deal, IBM Global Financing would deliver funding for the hardware and the SAP software licences in three stages: the first in September 2009, the second in December 2009 to coincide with the start of a 36-month IBM maintenance and support contract, and the third in April 2010. This would align with the progress of the implementation, with repayment for all three stages calculated across the 39-month period, to give Röchling Automotive a single monthly payment plan for the whole project.

“It is always easier to manage a project when you get everything from a single supplier, and IBM made the whole process very quick and simple,” says Thomas Fütterer. “The project itself still continues, and we are very satisfied with the financing side of it. The IBM Global Financing deal ensures that we can implement the latest technology to support our business-critical R&D processes, and also releases several million Euros of capital to invest in other projects.”

German PDF

Products and services used

IBM products and services that were used in this case study.

Hardware:
Storage, System p: Power 550, System x: System x3850

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