Agrícola Nacional transforms its business with SAP Business Suite on IBM BladeCenter

To read a Spanish version of this case study, click here.

Founded in 1948 and headquartered in Santiago, Agrícola Nacional is one of Chile’s leading manufacturers of agricultural products, including pesticides, insecticides, fungicides, seeds and animal feed. The company has expanded internationally, and now has offices and subsidiaries throughout Latin America. It employs more than 900 people, and generates annual revenues of around US$160 million.

In 2002, Agrícola Nacional decided to implement a centralized ERP solution to handle its most important business processes: sales, purchasing, finance, manufacturing and exports. The company chose JDEdwards Oneworld XE, running in a Microsoft Windows Server 2000 environment, and supported by a Microsoft SQL Server 2000 database.

To get the JDEdwards solution to meet its needs, the company had to invest in considerable customization and integration work, introducing a number of third-party applications to handle specific functional requirements. As a result, it became almost impossible to upgrade the JDEdwards system, and the company found itself in caught in a dilemma: Oracle was no longer willing to support Windows 2000, but the installed JDEdwards solution was not compatible with more recent versions of the Windows. The complexity of the systems landscape was also leading to unreliability, made worse by the need to keep patching the Windows operating system.

Advantages of SAP Business Suite
The company began looking for a new solution that would eliminate these technical issues and also provide a number of important new business functionalities. Following a comprehensive review of the possible options, Agrícola Nacional decided to migrate from the JDEdwards solution to SAP Business Suite 7.

“As the company expanded, we wanted to be able to use the same systems to manage our international offices and subsidiaries using a single ERP system, and SAP Business Suite offered the functionality we needed, out of the box,” says Francisco Friderichsen Herrera, CTO of Agricola Nacional. “Unlike the previous solution, SAP would allow us to manage all group companies together, while still enabling localization to make it easy to work with different currencies and tax laws in different markets.”

A further benefit of the SAP solution was its flexibility. SAP Business Suite offers support for a very wide range of business processes and is versatile enough to adapt to changing business requirements without the need for third-party software or excessive development work. Since Agrícola Nacional needs to comply with the International Financial Reporting Standards (IFRS), which are updated relatively frequently, the versatility of the SAP solution made it an ideal platform. The company estimated that achieving compliance with these standards would be 40 percent easier with the SAP solution.

“SAP would also make it possible for us to offer new services – corporate portal for business intelligence, human resources, and access to transactions in the different web modules – to our customers and employees over the Web,” comments Andres Ojeda, SAP Project Manager. “SAP Business Suite includes SAP NetWeaver Portal, which makes it easy to give users access to all sorts of tools, even if they’re working from home or using a mobile device. We particularly saw the value of portal based human resources applications such as SAP Employee Self Service and Manager Self Service, which enable employees to update personal information and even make vacation requests without any need for paperwork or manual processing.”

The company also planned to implement SAP NetWeaver Business Warehouse to provide business intelligence and reporting. In the mid term, this would be complemented by the implementation of SAP BusinessObjects, to provide real-time access to business data via personalized Web dashboards.

Building a new infrastructure
Convinced by the case for SAP Business Suite, the company began a detailed analysis of the infrastructure needs, and considered its options for how to implement the new solution. Its existing Windows infrastructure was running on Intel-based HP ProLiant servers.

“We wanted to move away from Windows onto a Unix platform that would offer better security and stability with less need for patching,” explains Andres Ojeda. “We therefore wanted to find a hardware vendor that could provide a reliable, high-performance hardware platform for Unix, SAP and our new databases. IBM was the best possible choice – its support and consulting in Chile are second to none. Moreover, we were very interested in the flexibility and efficiency of the IBM BladeCenter platform.”

BladeCenter: performance and versatility
Working with IBM Global Technology Services and Suministra, an IBM Business Partner, the IT team at Agrícola Nacional decided to deploy an IBM BladeCenter with IBM POWER6 processor-based blade servers running the IBM AIX operating system: JS12 blades with 3.8GHz processors for the SAP applications, and JS23 blades with 4.2GHz processors for the underlying Oracle databases. Storage is provided by an IBM System Storage DS4700 with 20 high-speed 146GB disks and ten 300GB disks connected to the BladeCenter by 4Gbps Fibre Channel.

“IBM POWER6 processors are among the fastest in the world for SAP workload, especially when combined with a high-performance storage system like the DS4700,” comments Andres Ojeda. “The ability to install up to 14 blades in a compact BladeCenter chassis is a big advantage – we can run our entire SAP platform within a single rack.”

In fact, there is enough space in the BladeCenter chassis for Agrícola Nacional to run several Intel Xeon processor-based HS22 blade servers, running Windows environments for the company’s email servers and other applications. With a mixture of processor architectures and operating systems running in a single chassis, the BladeCenter provides a comprehensive platform for all Agrícola Nacional’s IT needs.

“As a company operating in the agricultural sector, we are very concerned about our carbon footprint – so we are always looking for ways to save electricity and reduce our environmental impact,” adds Francisco Friderichsen Herrera, CTO of ANSAC. “The BladeCenter is designed to offer the maximum server density, and is very efficient in terms of power and cooling requirements compared to conventional servers. It has reduced our data center electricity requirements by 20 percent.”

The BladeCenter environment is currently running the SAP applications for around 180 users in Chile, and the company plans to extend the system and give access to international users in the near future. If more capacity is required, the company will simply be able to plug additional POWER6 blade servers into the chassis to meet the demand.

Increasing system availability
As a manufacturing company, with production lines operating around the clock, it is critical for Agrícola Nacional’s IT infrastructure to deliver high levels of availability. The blade servers are highly reliable, and the IBM AIX operating system is very stable and secure – but to protect against unforeseen circumstances such as component failure, the company decided to implement the IBM PowerHA high availability clustering solution.

“The Business Partner Suministra provided a great service throughout the project, but probably their most important contribution was to educate us on IBM’s clustering technologies,” comments CTO Francisco Friderichsen Herrera. “We designed an environment with dual-node IBM PowerHA clusters for the SAP ERP and SAP NetWeaver Business Warehouse production environments – so if one SAP application server fails, the other is able to take over the workload. This is a major step forward in terms of availability: Our old HP infrastructure, just didn’t offer this kind of clustering technology, and the maturity and reliability of the IBM PowerHA technology was a decisive factor in our choice of IBM hardware.”

Combining PowerHA with PowerVM – IBM’s advanced virtualization technology – makes it even easier to maintain availability. The PowerVM Live Partition Mobility feature means that the Agrícola Nacional IT team can seamlessly move virtual server workloads from one blade to another for load-balancing purposes, with no impact on SAP applications in production.

Supporting international expansion
Francisco Friderichsen Herrera concludes: “The introduction of SAP Business Suite has eliminated a number of major pain points, especially in terms of development costs, which have been reduced by 80 percent – making it easier for our company to expand further across Latin America. Supporting the SAP environment with IBM BladeCenter and DS4700 storage hardware has proven to be a smart move – providing the excellent performance, security, availability and flexibility we need to serve the business effectively and adapt to new computing requirements.”