Italian-Thai Development Company constructs an integrated business with IBM and SAP

Published on 30-Jan-2008

Validated on 01 Aug 2013

"The pre-packaged IBM System i 550 Solution Edition for SAP Applications provides a tightly integrated solution that is easy to manage and offers low long-term cost of ownership." - Woravudh Hirunyapaisansakul, Vice President of Computer Division, ITD

Customer:
Italian-Thai Development Public Company Limited

Industry:
Construction / Architecture / Engineering

Deployment country:
Thailand

Solution:
Enterprise Resource Planning, Infrastructure Simplification, Operational Management

IBM Business Partner:
SAP

Overview

Established in 1958, Italian-Thai Development Public Company Limited is the largest infrastructure construction company in Thailand and one of the largest civil engineering contractors in Southeast Asia. ITD has built numerous dams, hydropower stations, thermal power stations, water treatment plants, more than 3,000 km of roads, high and low-rise residential and office buildings, ports, airports and railways throughout Southeast Asia.

Business need:
ITD needed to replace its legacy financial systems with an integrated ERP solution, in order to improve the speed, accuracy and consistency of management information and reporting. Its existing solution was inflexible and costly to maintain, and it was difficult and time-consuming for business users to access the information they needed to support decision-making.

Solution:
ITD selected ERP software from SAP, and opted to run it on the IBM System i platform, using a four-way i820 for production and a two-way i270 for development and quality assurance. The company later upgraded to a single i550 with four IBM POWER5+ processors and IBM DB2 for i5/OS, purchased as an IBM System i 550 Solution Edition for SAP Applications – a packaged solution combining ultra-reliable IBM hardware, operating system and database with ERP software.

Benefits:
New i550 server cut generation time for the most complex report from six hours to just one; selection of IBM System i 550 Solution Edition for SAP Applications enabled rapid deployment and low total cost of ownership; new version of IBM DB2 database includes significant query performance enhancements; improved price-performance ratio for SAP software environment achieved through use of IBM POWER5+ technology.

Case Study

Established in 1958, Italian-Thai Development Public Company Limited is the largest infrastructure construction company in Thailand and one of the largest civil engineering contractors in Southeast Asia. ITD has built numerous dams, hydropower stations, thermal power stations, water treatment plants, more than 3,000 km of roads, high and low-rise residential and office buildings, ports, airports and railways throughout Southeast Asia. ITD has a skilled workforce of more than 30,000 people and recorded sales of 40.5 billion THB (approximately 1.3 billion USD) in fiscal 2006.

With numerous permanent and temporary office sites throughout Thailand and other Asian countries, ITD has a complex and geographically dispersed organization. The company was using its own in-house developed software to manage purchasing and accounting, and the limited integration between the different modules in the system made it difficult and time-consuming to produce accurate management information.

“We wanted to have real-time financial information, with up-to-the-minute accounting positions and information on outstanding debtors and creditors – this was simply not possible with our existing home-grown system,” says Woravudh Hirunyapaisansakul, Vice President of Computer Division. “With an ERP solution from SAP running on an IBM System i 550 Solution Edition for SAP Applications we have a fast, reliable and fully integrated solution that enables all users to access the same accurate data in real-time.”

Looking for tighter integration

ITD was previously running its back-office functions on an IBM AS/400 in its Bangkok headquarters, using in-house RPG software for general finance and accounting with J.D. Edwards software for General Ledger. The remote sites and branch offices were not directly integrated with these systems, so the production of management reports involved the manual collation of data submitted on spreadsheets.

“Without a centralized store of consistent, up-to-the-minute data on financial performance, it was very difficult and time-consuming to produce accurate and reliable reports,” says Woravudh Hirunyapaisansakul. “This was impacting the quality and speed of executive decision-making, since we could not always be sure that data was accurate, consistent or timely. Managers were spending many hours each month manually preparing and distributing reports, and it was never easy to quickly find the specific piece of information you might be looking for.”

He adds: “In IT terms, the previous solution was relatively inflexible, and highly reliant on the skills of our internal team. It took a lot of time and effort to develop new functionality, and maintenance costs were high. We wanted to move to a packaged ERP solution that would incorporate industry best practices, so that our internal team could focus less on fixing legacy code and more on developing new initiatives to support the business.”

Accurate and timely information

Following a review of offerings from major vendors, ITD selected SAP software as its strategic platform for back-office operations. The company saw SAP as the market-leading global provider, and was particularly impressed by the vendor’s global reach and large pool of skilled consultants.

Says Woravudh Hirunyapaisansakul, “We were able to pick the SAP consultants with the best fit for our company, which helped us to achieve a rapid and smooth implementation. We were confident that the SAP software would improve our efficiency, and the full integration across different functional areas was a very attractive feature.”

ITD implemented ERP software from SAP, including financial accounting, controlling, materials management, plant maintenance, project systems, and sales and distribution functionality. The SAP solution provides a centralized and fully integrated environment for managing the ITD business, delivering accurate, up-to-the-minute data to all users in all departments.

ITD initially deployed the SAP software on two IBM System i servers: an i820 with four processors for production workload and an i270 with two processors for development and quality assurance. The company later upgraded to a single IBM System i 550 Solution Edition for SAP Applications running IBM i5/OS V5R4, protecting its investment in internal skills while improving the performance and availability of its SAP software.

“We had excellent knowledge of the System i platform, and had always found it to be a stable and easy-to-manage platform,” says Woravudh Hirunyapaisansakul. “The local IBM support is very strong, and the new i550 offers great performance as well as absolute reliability.”

He adds: “In addition, the pre-packaged IBM System i 550 Solution Edition for SAP Applications provides a tightly integrated solution that is easy to manage and offers low long-term cost of ownership.”

Dynamic resource management

The i550 has four POWER5+ processors rated at 1.9GHz – two are active, and the remaining two can be switched on temporarily or permanently to accommodate future growth in workload. The server is sub-divided into two logical partitions, one for the production SAP workload and one for development and quality assurance systems.

“The production partition is “uncapped”, so it can take over the resources of both processors whenever there is minimal work on the development partition,” says Woravudh Hirunyapaisansakul. “The solution is effectively self-tuning, helping us to get excellent return on our investment in hardware – and we can also dynamically move system memory between partitions without rebooting. This flexibility in reallocating system resources is the key benefit of moving from two physical servers to logical partitions on a single server.”

System performance improved significantly with the migration to the new i550: the longest background process for report generation was cut from six hours to just one, thanks largely to the four IBM POWER5+ processors in the new server. Equally, consolidating to a single server reduced the total electrical power consumption and heat generation, and simplified the physical infrastructure at ITD.

ITD uses IBM Director software to help manage its servers, enabling remote monitoring and control over hardware performance. In addition to boosting the availability of core business systems, IBM Director reduces the cost of support and accelerates problem resolution.

Accelerating information with DB2

ITD worked with SAP and IBM Global Business Services to plan, implement and roll out the SAP environment, keeping business users involved at every step and educating them to get the full value from the solution. “With SAP providing expertise on the software and IBM Global Business Services ensuring an ideal hardware set-up, the deployment phases ran very smoothly,” says Woravudh Hirunyapaisansakul.

ITD has approximately 120 users for the SAP software, with a 775GB database managed in IBM DB2 for i5/OS V5R4, currently growing at 10 per cent annually. DB2 is fully integrated into the i5/OS operating system, simplifying administration and reducing costs. ITD also takes advantage of the DBA Cockpit to carry out most database administration from inside the SAP environment.

The new System-Wide Index Advisor for DB2 on the System i platform enables ITD to easily determine at the time of creation which potential index will offer the best data access performance. Additionally, the powerful new internal disk controller that ships with DB2 for i5/OS V5R4 enables excellent SQL performance, further boosting the responsiveness of the SAP software.

“Using DB2 with the latest SQL Query Engine technology provides superb performance for our SAP software,” says Woravudh Hirunyapaisansakul. “We have seen consistently faster system response times since implementing the new System i server, helping us to improve customer service. In addition, the SAP and IBM solution gives us the ability to analyze and track business performance data in real time.”

Reliable and responsive solution

The introduction of SAP software on the IBM System i platform has given ITD a stable, responsive and fully integrated ERP solution for managing all back-office operations. With zero unscheduled downtime for the SAP software environment, ITD staff can work at full efficiency and with no interruptions to smooth workflow. Crucial data that was previously spread across multiple disconnected systems is now managed in a consistent central store, enabling instant access to reliable data for all employees. Productivity in business decision-making has improved significantly, since business users no longer have to hunt for relevant data or spend hours collating information from different sources. Equally, ITD has been able to streamline its operations, eliminating redundant or duplicated process steps and freeing up employees to work on projects that bring added value to the company.

“The SAP software has enabled us to automate many reporting tasks, eliminating a large amount of manual work and accelerating the flow of information across the business,” says Woravudh Hirunyapaisansakul. “With all data centrally managed, our costs are lower and our processes are more auditable. Most importantly, the SAP software has considerably improved the accuracy and timeliness of reporting, helping our users to find better solutions to business challenges more rapidly.”

Moving away from an internally developed solution has significantly reduced the cost of IT operations at ITD, freeing up skilled staff from maintaining inflexible legacy code. In the long-term, the switch to a best-of-breed solution will also reduce risk for ITD, since the company is no longer dependent on a small number of internal support staff, but can draw instead on the tens of thousands of global experts in SAP software.

“Running SAP software on the new i550 is easier and less costly to manage and support than our previous in-house solution,” says Woravudh Hirunyapaisansakul. “We benefit from the best-practice approaches developed by SAP over decades of dealing with enterprise customers, while our own IT staff have better availability to support business users. The local IBM System i team is highly proficient and provides timely and efficient problem resolution – though in practice the i550 is so stable and reliable that we rarely require any external assistance.”

He concludes, “The IBM and SAP solution gives ITD a reliable, responsive and scalable system for managing all aspects of the business.”

Products and services used

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

Hardware:
System i: System i5 550

Software:
IBM Director, DB2 for i5/OS

Operating system:
IBM i

Service:
IBM-SAP Alliance, IBM Global Business Services

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