South African Broadcasting Corporation tunes in to success with SAP and IBM

The South African Broadcasting Corporation’s (SABC) vision is to become the enabler for “Total Citizen empowerment” through the combination of distinctive, compelling programming and sound business practices. With around 3,500 employees, offices in every region of South Africa, and revenues of more than ZAR4.2 billion (approximately €350 million), the SABC is a very high-profile enterprise.

The broadcast marketplace is developing rapidly in South Africa, and even though the SABC is a partly state-funded public service broadcaster, regulatory pressures and increased competition directly affect its business model and success.

To deal with these challenges, the SABC changed its business structure and became a corporation – imposing new demands on reporting standards, finances and corporate control. Success in the new environment is dependent on the IT systems that support its business processes. However, the existing systems at the SABC were not fully integrated, causing difficulties.

Celesta Rosenzweig, Project Manager at the SABC, explains: “We had 34 key business systems, used daily in the finance, human capital and resource management functions to process transactions, record details, resolve queries and provide information for decision-making. In many cases there were functional overlaps, leading to duplicated workload. When drawing together financial reports, such as procurement accounting, we found we had multiple versions of the truth. Collecting, comparing and standardizing even simple financial data was slow and prone to error. “

These systems were developed in 12 languages, using six database platforms and four operating systems, and were not integrated or interfaced in most instances, with manual data transfer and entry. Business processes required manual intervention and multiple controls to address the possibility of human error.

Staff were keeping track of transactions and activities using spreadsheets, which created a great control risk. There was a considerable risk that the current systems would not remain operational, owing to limited resources internally and external to the SABC who were technically able to work on these dated legacy technologies.

“The systems and applications were aging, and were expensive to maintain. With many different software and hardware vendors to control, the IT department’s administration costs were rising. The aim was to solve the twin information and infrastructure issues, reducing operational expenditure and delivering accurate data more rapidly. With a deregulated marketplace and the need to fund commercial operations, the SABC had to streamline its information flows.”

Matching IT to TV

Working with IBM Global Business Services, SABC reviewed ERP service providers, looking for the closest fit to its broadcasting needs – a solution that would cover both state-funded and commercial operations. Part of the process would be to transform the organization itself into a forward-facing enterprise, able to sell programming to a global audience.

The key criterion would be the implementation of a stable and predictable back office administration service to promote internal efficiency. This would include an employee self-service environment that would reduce the central workload and provide some degree of employee empowerment. This forms part of the SABC “Vuka Sizwe!” (“Winning Nation!”) initiative, which aims to uplift the nation and develop skills.

The specific objectives were to complete the implementation without business disruption, and to reduce information delivery times to the finance and human resources departments.

“The SABC selected the SAP ERP application as being the closest fit for its business,” says Celesta Rosenzweig. “By replacing disparate, disconnected systems with a coherent, integrated platform from SAP, the SABC would be able to meet all of its business and corporate social responsibility commitments, as well as reduce the total costs of operations.

“IBM Global Business Services provided critical assistance with implementing the SAP applications. They deployed the Ascendant methodology, which helps to ensure that the SABC achieves maximum business benefit for this very significant investment.”

Program of events

The SABC elected to implement a comprehensive suite of SAP applications to run all aspects of the business, from procurement through intellectual property to corporate governance. Based on a shared database, the SAP applications form a consistent and reliable information backbone for every aspect of the SABC’s operations.

To manage the design process and configuration of the project (named “Moribo,” which means “pulse”), the SABC deployed SAP Solution Manager, and used the IBM Ascendant Methodology for best practices project management and project control. The initial implementation covered SAP ERP financial applications, including general accounting, management accounting, procurement to payment, project accounting and sales to cash as well as human capital management applications including payroll.

“The SAP applications offer the SABC greater control of its accounting procedures in every way. Financial processes, such as month-end closes, are completed more quickly, and reporting is more accurate,” says Celesta Rosenzweig.

IBM Global Business Services is implementing SAP NetWeaver Portal as well as SAP NetWeaver Business Warehouse and the SAP Business Consolidation Solutions (BCS), which will help the SABC with the monthly and yearly consolidation exercises. The SABC will also be taking advantage of SAP Balanced Score Card (BSC), and the financials and human capital management applications will be part of the key performance indicators measured in the BSC application.

Regulated broadcasting

With incorporation of the SABC, certain laws and regulations have become applicable for the first time, such as The Companies Act and The Income Tax Act. The legacy systems were not developed with tax in mind, and it required enormous manual effort to generate the required tax computations. The SAP ERP applications assist greatly in complying specifically with Section 38 of the Public Finance Management Act and supplies the required audit trail of all transactions and changes to the system or master files.

“The disconnected legacy systems made compliance with financial regulations, state directives and copyright reporting a difficult and slow process,” says Celesta Rosenzweig.

“The new SAP applications are accredited as conforming to Generally Accepted Accounting Principles (GAAP), and reports required to meet Black Economic Empowerment (BEE) and Small, Medium and Macro Enterprises (SMME) legislation can be generated directly through the system.

“Reports for the Independent Communication Authority of South Africa (ICASA) and for the South African Recording Rights Association Limited (SARRAL) may also be generated directly from the SAP applications, saving considerable time, effort and expense. “

“IBM Global Business Services was able to design and execute an implementation program that has delivered a complete transformation in the way we work at the SABC,” says Celesta Rosenzweig. “It took a while to get used to the new applications, but with assistance from IBM Global Business Services, the SABC has a solution that offers excellent business support and has reduced operational costs.”

Media specialism

The SAP for Media solution portfolio proved particularly attractive for the SABC. This set of solutions has been specifically tailored for print, broadcast and related media enterprises, and the SABC chose to implement the SAP Intellectual Property Management (IPM) application.

IPM allows the SABC to manage a wide range of essential media activities – acquire rights, research rights, clear rights, license rights, manage rights contracts, assess risks, contribution payments, incoming royalties accounting and outgoing royalties accounting – from a single place.

“The SAP Intellectual Property Management application is an essential part of the SABC’s business strategy. As we move into more commercialization of our broadcast activities, the integrated financial control that IPM provides helps us to exploit our assets more effectively and compete in the deregulated environment,” says Celesta Rosenzweig.

Geographic coverage

With a geographically dispersed operation and thousands of employees, effective personnel management is a constant challenge for the SABC. Leave requests, address changes and related personal data generated a very high administration workload for the Human Resources department, which had many other duties such as social responsibility and education programs.

To reduce the expenses caused by this paperwork trail, SABC implemented the SAP ERP Human Capital Management application, including SAP Employee Self-Service (ESS). This allows the SABC staff to log on and update their details without intervention from the human resources team, directly into the SAP applications.

“We are also deploying kiosk-based access to the ESS application, using SAP NetWeaver Portal technologies. The SABC has employees without access to a personal computer, and the highly configurable web-browser access to ESS is proving an enormous advantage for the SABC.”

Closing credits

The SABC has become an all-SAP environment, with integrated applications governing every aspect of operations. For example, the newly deployed SAP Travel Management application, part of the SAP ERP Corporate Services solution, is helping to automate travel requests, authorization, expenses and budgeting.

“Financial reports are now based on shared, accurate data available throughout the SABC, enabling rapid, fact-based decisions. Report generation itself is expected to improve from several days to mere hours for close-of-month financials. The introduction of employee self-service will see human resource department productivity rise, and the total costs of operation for IT services is forecast to be reduced,” says Celesta Rosenzweig.

“In summary, the SAP applications and the advice from IBM Global Business Services have produced a solution which allows the SABC to reduce operational costs and prepare for the commercial future.”