Norkis Group prepares for expansion with IBM and SAP

Published on 12-Feb-2009

Validated on 03 Dec 2013

"What tipped us towards the IBM solution was the superior virtualization functionality offered by the Power Systems platform... With Power Systems, we can work with IBM Global Technology Services to create additional virtual servers on the p5-550s and simply add suitable disk capacity as required. This is a considerable cost saving, not to mention the reduction in complexity." - Ronald Alfeche, Chief Information Officer, Norkis Group

Customer:
Norkis Group

Industry:
Automotive

Deployment country:
Philippines

Solution:
C-Suite Framework, Customer Relationship Management, Enterprise Resource Planning, Optimizing IT, Supply Chain Management, Virtualization

IBM Business Partner:
SAP, SSI

Overview

Best-known for motorcycle, car and light van production, the Norkis Group is a leading conglomerate in the Philippines.

Business need:
Business systems at Norkis Group were not capable of supporting expansion plans to include financing capabilities. Reports were based on manual or partly automated data collection systems, which were not always reliable. With customer databases spread across multiple sites, the inability to paint a complete group-wide picture of customer transactions was reducing sales opportunities and impacting market development.

Solution:
Norkis Group replaced its diverse, decentralized systems with SAP ERP and SAP Customer Relationship Management applications, supported by IBM DB2. The applications run on an IBM Power Systems server, using IBM PowerVM virtualization technologies to provide a flexible, adaptable information infrastructure.

Benefits:
Single database allows accurate, rapid reporting on customer transactions, increasing the potential for repeat sales and development of new market sectors. SAP applications ensure simple and reliable financial and production reporting, helping managers to improve key performance indicators such as collections, inventory turns, delivery lead times and forecasting accuracy. IBM Power Systems servers offer enhanced reliability and performance, even as Norkis Group grows.

Case Study

Best-known for motorcycle, car and light van production, the Norkis Group is a leading conglomerate in the Philippines.

The diverse product range and multiple branch locations – the company has more than 300 branches – combined to bring significant management challenges. With many different local sales and accounts systems in use, group reporting relied on manual intervention to collate data. To capitalize on economies of scale, and to develop and share efficient business processes, Norkis Group needed to introduce standardized processes for all the financing and sales outlets. The ultimate aim was to enable rapid national growth in the Philippines.

Ronald Alfeche, Chief Information Officer, comments, “Norkis Group is growing fast, and we see great opportunities for both retail and financing. To help us take these opportunities, we have committed to world-class industry best practices for demand forecasts, on-time delivery, and business performance information.”

Looking at the business needs

Norkis Group embarked on a root-and-branch review of its business systems, aiming to harmonize, standardize and simplify the entire infrastructure. The outcomes would be enhanced business processes, a fully ISO-compliant documented system optimized to meet the growing group’s needs, and user-friendly reporting for financial and production executives.

“The integration of all business functions into a single, centralized system would enhance group-wide productivity and flexibility,” says Ronald Alfeche. “Key business data and information would be automatically generated to provide higher levels of business performance visibility at senior executive level, while preserving the ability to drill-down and dig deeper into details.

“With a centralized ERP solution, the Norkis Group would be better equipped to forecast demand, increase on-time delivery, reduce lead-times and make realistic and achievable commitments. This would open avenues for new businesses and growth strategies.

Norkis Group selected SAP ERP and SAP Customer Relationship Management applications as the strategic core for its new business management solution. The SAP ERP application includes controlling, customer service, financial accounting, financial supply chain management, materials management, and sales and distribution functionalities, and can manage most of Norkis Group’s core business processes.

“SAP ERP will be an essential tool to enable the Norkis Group to grow aggressively, both in current and in future market sectors,” comments Ronald Alfeche.

Creating a single, central database

To make the integrated application environment possible, the first step was to create a single database of common conventions to eliminate contradictory information from independent and disparate systems.

Built on this foundation, the new SAP applications could provide standard data for business processes, allowing its key divisions to manage its resources better. The focus would be on more inventory turns, better vendor relationships to help reduce delivery lead times, improved scheduling to reduce downtime, and enhanced customer service.

The combined effect would help to increase repeat business, and to enable a degree of cross-selling of Norkis Group products.

In consolidating to a centralized solution, the choice of underlying database became critical, determined by performance, reliability and scalability.

“Norkis Group selected the IBM DB2 database, based on its advanced integration with SAP applications. DB2 offers excellent performance alongside enterprise-strength backup and recovery solutions. It is able to handle the very large data sets that we expect to generate, and gives us room to grow as the business itself expands,” says Ronald Alfeche.

Many DB2 automated optimization features are specifically designed for SAP environments, and most administration activities are automated, helping to reduce operating costs. Examples of DB2 automation include the Self-Tuning Memory Manager (STMM), designed to optimize memory usage, and automatic collection and storage of database statistics, backup and logfile management, as well as table and index reorganization.

The DB2 optimizer uses automatically generated statistics to choose the best access plan to ensure that query resolution runs at optimal performance. With these self-managing features in place, administration costs are kept to a minimum and existing processor and storage infrastructure is exploited to the maximum possible extent, reducing the need for costly upgrades.

Selecting the best infrastructure

The remaining decision for Norkis Group was to choose the supporting infrastructure. An initial plan for 10 Intel-based servers was discarded in favor of a single IBM Power Systems server for the SAP ERP application and a second server for SAP Customer Relationship Management. Using IBM PowerVM virtualization functionality, these two servers provide separate environments for each application, which can have appropriate compute and system resources allocated in order to meet service level agreements. Two more servers act as failover and database systems, completing a highly resilient, high-performance solution.

“Working with advice from the IBM Business Partner, SSI, we were able to consolidate our hardware environment and leverage the virtualization capabilities of the Power Systems platform. This included a business continuity plan, creating a highly available landscape that includes cross-site disaster recovery, at much lower cost than the equivalent clustered solution,” comments Ronald Alfeche.

IBM Global Technology Services provided implementation services, and Norkis Group agreed a three-year maintenance contract, offering 24x7 support for all hardware and software.

“What tipped us towards the IBM solution was the superior virtualization functionality offered by the Power Systems platform. With an Intel-based solution, if a hardware requirement came up that wasn’t part of the initial sizing plan, we would have been faced with having to purchase extra servers. By contrast, with Power Systems, we can work with IBM Global Technology Services to create additional virtual servers on the p5-550s and simply add suitable disk capacity as required. This is a considerable cost saving, not to mention the reduction in complexity.”

Norkis Group selected an IBM Systems Storage DS4700 storage system to provide application and data storage. The DS4700 can be expanded to a total of 33.6TB, offering Norkis Group significant growth options for the immediate and near future.

Meeting business growth needs

With the Power Systems servers in place, unplanned downtime has been eliminated and planned system maintenance does not impact business operations. Reliability and availability are essential for Norkis Group if it is to achieve its ambitions.

Ronald Alfeche reports, “With the SAP applications deployed, separate manual or semi-automated systems for business reporting and control have been replaced with shared, standardized information services based on highly reliable infrastructure. Staff efficiency is rising, based on easy access to accurate data. Even building electricity consumption has declined, with fewer staff working late into the night to extract data!”

“With a single database, we can track transactions for each customer, allowing us to target and improve our repeat-customer sales. Using SAP Customer Relationship Management we can identify and understand the behaviors of our most profitable and largest customers, helping us to direct our sales towards new sectors and develop new offerings.”

Products and services used

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

Hardware:
Storage: DS4700 Express, System p: System p5 550 Express - AIX 5L Edition

Software:
DB2 for AIX

Operating system:
AIX

Service:
GTS ITS Server: Server Product Services for Power Systems, GTS ITS Storage & Data: Storage & Data Product Services, GTS Technical Support Services: Hardware Maintenance, IBM-SAP Alliance, GTS Data Center Services

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