DKSH expands its business with a highly scalable solution from SAP and IBM

Published on 04-Jan-2011

Validated on 05 Jun 2013

"With the robust IBM infrastructure architecture supporting our SAP applications, DKSH has improved data security and business continuity, unmatched by any other company operating as a service provider in our market." - Matthias Legler, Vice President of IT at DKSH

Customer:
DKSH

Industry:
Wholesale Distribution & Services

Deployment country:
Malaysia

Solution:
IT/infrastructure, Business Integration, BA - Business Intelligence, Business Resiliency, Enabling Business Flexibility, Enterprise Resource Planning, High Availability , Information Infrastructure, Optimizing IT, Optimizing IT

IBM Business Partner:
SAP

Overview

Headquartered in Zurich, Switzerland, but with a strong Asian presence for more than 140 years, DKSH focuses on providing market expansion services for its business partners. It specializes in helping companies bring products and services to market. Operating in 35 countries, DKSH has 540 locations in the Asia-Pacific region, and 20 in Europe and the Americas. The organization consists of four business units: Consumer Goods, Healthcare, Performance Materials and Technology. Employing 22,000 people, DKSH achieved sales of CHF 8,576 million in 2009 (approximately 8,270 million US dollars).

Business need:
After its merger in 2002, DKSH found that its heterogeneous, unconnected IT systems were preventing it from capitalizing on economies of scale and causing inconsistent levels of IT performance at different locations. Employees were spending too much time and effort consolidating information across the fragmented Enterprise Resource Planning (ERP) systems. These were inhibiting reliable company-wide reporting and monitoring, making it difficult to identify potential process improvements. Disaster recovery capabilities did not meet the company’s aggressive growth needs.

Solution:
The journey to develop a global ERP template started in 2005 and was based on SAP ERP applications, including Financials, Controlling, Materials Management, Sales and Distribution and Warehouse Management. SAP NetWeaver Business Warehouse will provide company-wide reporting and analytics capabilities, while SAP Business Objects Governance, Risk and Compliance (GRC) is being used to protect assets and information. The company also worked with IBM Global Technology Services to deploy IBM Power 570 and IBM Power 550 servers, running IBM AIX and a suite of IBM Tivoli software.

Benefits:
DKSH has gained an integrated, consistent ERP system based on SAP ERP, enabling it to exploit economies of scale to make significant efficiency gains. IT employees at DKSH spend less time managing ERP systems, and the highly reliable IBM Power servers reduce time spent resolving performance issues. Using the global ERP template based on SAP ERP, DKSH can rapidly and effectively integrate new acquisitions into the company, allowing it to move into new markets faster. Total recovery from disaster, which used to take at least 24 hours, can now be achieved within two to four hours.

Case Study

Headquartered in Zurich, Switzerland, but with a strong Asian presence for more than 140 years, DKSH focuses on providing market expansion services for their business partners. It specializes in helping companies bring products and services to market. Operating in 35 countries, DKSH has 540 locations in the Asia-Pacific region, and 20 in Europe and the Americas. The organization consists of four business units: Consumer Goods, Healthcare, Performance Materials and Technology; and within these, covers the five main areas of sourcing, research and analysis, marketing and sales, distribution and logistics, and after-sales services. Employing 22,000 people, DKSH achieved sales of CHF 8,576 million in 2009 (approximately 8,270 million US dollars).

Following its merger in 2002, DKSH found itself with numerous, unconnected ERP systems at different locations, forcing the company to take an inefficient, ad hoc approach to enhancements and changes. With reporting and monitoring conducted on a location by location basis, gaining an overall view of operations was highly problematic, preventing DKSH from becoming the agile, responsive and efficient company it wanted to be.

Under the project name ‘Pegasus’, DKSH initiated a total transformation of IT systems in 2005. Implementing SAP ERP and creating a SAP ERP based global template have given DKSH the tools to optimize processes across the company, while accelerating expansion. Implementing software to facilitate better business intelligence and analytics improved transparency for internal users, partners and clients who wanted to track their performance. With reliable, scalable hardware supporting these applications, DKSH cut operational costs, minimized risk and ultimately gained an essential competitive edge.

Lacking consolidation and scalability
DKSH conducted a review of internal processes and identified a need for consolidation and standardization. Growing by acquisition had led to multiple enterprise resource planning (ERP) applications in use across DKSH, including different versions of SAP ERP, and solutions from JD Edwards, Scala and others. Disparate ERP systems rendered it almost impossible to undertake reliable company-wide monitoring or internal and external reporting.

Matthias Legler, Vice President of IT at DKSH comments, “Often, we found employees from different locations ‘re-inventing the wheel’ in cases where changes or enhancements needed to be made to the applications, when a similar procedure had already been undertaken successfully elsewhere in DKSH. We wanted to adopt a more effective approach, spreading best practices throughout the organization, accelerating progress and saving time and expense; so we began looking to standardize on the ERP system that best met our needs.

“Also, we were finding it very difficult to consolidate information from the multiple ERP applications. This was holding us back from analyzing the company’s performance as a whole: for example, gathering important information needed for corporate-level decision-making was a highly complex and time-consuming process.”

The company faced a similar challenge with its underlying IT infrastructure, as different locations had a mixture of IBM, HP, Sun Microsystems and Intel servers, some running Microsoft Windows operating systems, others supporting UNIX landscapes. The mixed landscape was highly complex to manage and maintain.

Furthermore, the legacy hardware lacked flexibility and scalability, presenting significant barriers to growth.

Pegasus takes flight
DKSH initiated project ‘Pegasus’ in 2005, with goals including the increase of efficiency through centralization and the development of a platform to facilitate growth and enhancement of IT management. The company selected SAP ERP, with modules for Financials, Controlling, Materials Management, Sales and Distribution and Warehouse Management.

The operations and business support teams at the IT headquarters in Kuala Lumpur planned to develop a global template based on SAP ERP, to be rolled out to DKSH locations. These locations could use the template to easily and quickly deploy a pre-configured, standardized ERP system, which is integrated with the central hub in Kuala Lumpur. Local IT teams were then able to tailor this to suit their needs, making adjustments to suit the location’s market and operations.

“Our business is highly diverse, and therefore each DKSH business unit needs specific functionalities of the SAP applications,” says Legler. “On the other hand a lot of ‘me too’ processes are common and can be harmonized. By creating a global ERP template based on SAP ERP, we are able to reap the benefits of a standardized and quick roll-out without neglecting the specific needs of different business areas.”

Supporting business expansion
The global template would also be used with every new acquisition, enabling DKSH to replicate its business model rapidly and efficiently at new locations.

Legler explains, “Our global SAP environment gives us a significant competitive edge by accelerating growth into new markets without sacrificing the standard of our operations. We are able to ‘dock in’ new business much faster, and since the template delivers the ERP solution fully integrated with our headquarters operations and our global data centre, we avoid the risk of ending up with the dispersed systems we had before.

“DKSH prides itself on its ability to penetrate new markets rapidly, with limited risk and without incurring high costs – SAP ERP is a key enabler to achieve this core business goal.”

Selecting IBM hardware
To support the SAP ERP implementation, DKSH wanted to overhaul its existing IT infrastructure, which was suffering performance issues. It also wished to standardize its hardware, replacing the mixed infrastructure supporting its business-critical applications with technology from a single vendor. This would make management and support for the solution easier, and enable DKSH to take a more efficient approach to licensing.

Working with IBM Global Technology Services, the company deployed IBM Power servers running IBM AIX, replacing the mixed landscape including servers from Intel, HP and Sun Microsystems.

“We conducted a comprehensive review of available offerings, and selected the IBM solution when we discovered it offered the lowest total cost of ownership,” says Legler. “Also, IBM presented us with a very clear roadmap for the future, showing that there is a long-term strategy in place for the Power Architecture, which made us feel comfortable we were making a wise investment for years to come.”

For storage, DKSH selected the IBM System Storage DS series, including DS8700 and DS4800 disk systems, and an IBM System Storage 3584 Tape Library.

The IBM solution has given DKSH superb reliability and availability, helping the company meet client service level agreements (SLAs) in a demanding environment. The IBM servers and storage systems offer outstanding scalability, enabling DKSH to make the most of opportunities for growth.

“Since implementing the IBM Power servers and DS storage, we have experienced 100 percent uptime in terms of server operation,” comments Legler. “The performance, reliability and stability of our hardware platform are better than ever before, and we can easily grow the system to keep pace with the dynamic growth of DKSH.”

Rapid recovery from disaster and effective operational management
With variable levels of disaster recovery at different locations, DKSH wishes to put into place a consistent, effective strategy across the company. To meet this requirement, the company selected IBM Tivoli Storage Manager to provide online database backup for SAP applications, Microsoft SQL Server and IBM Lotus Domino, and LAN Free Backup to automate data backup.

The team from IBM Global Technology Services also helped DKSH implement a third-party solution. Overall, the company’s response has dramatically improved with the time to recovery reduced from a period that varied from 24 hours to a few days, to within two to four hours.

“If our systems fail – which they haven’t yet, thanks to IBM Tivoli Monitoring – the combination of Tivoli Storage Manager and IBM hardware will enable us to be back online in all within two to four hours. This is a huge improvement that will translate into a key competitive advantage.”

IBM Tivoli Monitoring provides DKSH employees with the ability to keep an eye on infrastructure and application performance and availability with minimum effort. IBM Tivoli Monitoring is used to manage all components including SAP applications, helping DKSH identify and resolve bottlenecks and work proactively to ensure availability of business critical applications.

Legler adds, “With Tivoli Monitoring, we are alerted to potential issues before they become a problem, improving our responsiveness and enabling us to pre-empt disaster. We are directed to exactly where a problem might arise, helping us respond much faster and avoid any downtime.”

To handle and manage the different workloads and jobs across the SAP landscapes, DKSH uses IBM Tivoli Workload Scheduler. TWS allows a central control over all workloads, providing transparency of SAP workloads and extends automation to SAP environments.

Protecting infrastructure assets
SAP BusinessObjects Governance, Risk, and Compliance (GRC) was deployed to control access to key infrastructure assets and information, guarding against fraud and mistakes.

“SAP BusinessObjects GRC allows us to put strict access control safeguards in place, so that we can be confident we are embedding compliance and maximizing transparency in all our business processes,” explains Legler.

Accurate, company-wide reporting
DKSH chose to implement SAP NetWeaver Business Warehouse, SAP NetWeaver Business Warehouse Accelerator and SAP BusinessObjects for reporting and analytics purposes.

New reporting capabilities are provided by SAP NetWeaver Business Warehouse, which presents a ‘single version of truth’, enhancing corporate decision-making capabilities. Since deploying SAP NetWeaver Business Warehouse Accelerator, DKSH has seen performance of month-to-date queries, such as sales figures for individual products, improve significantly – in some cases by 90 percent.

The DKSH teams have developed a number of in-house applications giving certain customers access to information such as sales data and stock numbers for certain products.

Enjoying the benefits
DKSH has gained an integrated, robust enterprise resource planning system based on SAP ERP running on IBM infrastructure. The global ERP template has enabled it to capitalize on opportunities for growth, and with a highly scalable infrastructure, DKSH can be confident it has the IT solution to sustain continued success.

Legler summarizes: “With the robust IBM infrastructure architecture supporting our SAP applications, DKSH has improved data security and business continuity, unmatched by any other company operating as a service provider in our market. The solution has given us the capabilities to drive efficiencies and increase operational effectiveness, leading to better service for our clients. Today we have a reliable, scalable high-end solution in place to support our company growth.”

Products and services used

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

Hardware:
Power 550 Express, Power 570, Power Systems, Storage: DS4800, Storage: DS8700

Software:
AIX, Tivoli Storage Manager, Tivoli Monitoring, Tivoli Workload Scheduler, Tivoli Netcool/OMNIbus

Operating system:
AIX

Service:
GTS ITS Server: Server Product Services for Power Systems, IBM-SAP Alliance, GTS Data Center Services

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