Votorantim Group builds an integrated enterprise and cuts costs with IBM and SAP

Published on 11-May-2012

Validated on 04 Nov 2013

"With the help of IBM, our SAP suite can now support approximately 4,000 concurrent users, and the whole user base amounts to over 10,000 individual accounts accessing some 22 TB of data. Our IT infrastructure is fully integrated across our business." - José Evaristo, IT-Operations Manager, Votorantim Group

Customer:
Votorantim

Industry:
Industrial Products

Deployment country:
Brazil

Solution:
BA - Business Intelligence, Business Resiliency, High Availability , Information Integration

IBM Business Partner:
TIVIT, SAP

Overview

Founded in 1919, Votorantim Group in Brazil is one of the largest industrial conglomerates in South America, with interests including agribusiness and the manufacture of cement, metals, steel, pulp and paper. Votorantim has production, logistics and sales units in more than 20 countries, employs around 40,000 people, and posts annual sales of more than R$28.6 billion ($18.5 billion). Before 2007, each part of the group operated its own IT infrastructure and business management software, including, for example, Informix and Oracle.

Business need:
Votorantim wanted a way to increase agility and improve communication between its diverse business units, which were using different IT standards and ERP solutions. The group struggled to control exploding volumes of data, held in multiple databases that were costly to manage. Existing database storage was poorly utilized. Certain tasks could only be performed offline, and many business-critical databases were taken offline for up to 12 hours every month for maintenance.

Solution:
Votorantim worked to create a single shared technology center to serve all of its industrial units. The group migrated to an integrated SAP ERP solution available for all its business units, running on IBM Power 795 and Power 595 servers, supported by IBM DB2 database software. All 10,000 users, in Brazil and worldwide, access a single SAP ERP and database landscape. Local IT operations have been scaled back and costs greatly reduced, and the centralized solution provides very high information availability and data security.

Benefits:
By standardizing on centralized SAP ERP applications supported by IBM DB2, Votorantim provides accurate, shared information across the entire group and to headquarters executives. Compression of IBM DB2 tables and indexes deliver data storage savings of more than 40 percent. Online defragmentation and online table migration features in DB2 provide increased availability by two hours per month, a 20 percent improvement.

Case Study

Founded in 1919, Votorantim Group in Brazil is one of the largest industrial conglomerates in South America, with interests including agribusiness and the manufacture of cement, metals, steel, pulp and paper. Votorantim has production, logistics and sales units in more than 20 countries, employs around 40,000 people, and posts annual sales of more than R$28.6 billion ($18.5 billion). Before 2007, each part of the group operated its own IT infrastructure and business management software, including, for example, Informix and Oracle.

This distributed IT model was comparatively costly to run, and the collection, validation and consolidation of information for management purposes was difficult and slow. The total amount of data – much of it duplicated – and the cost of storing it were both rising fast. José Evaristo, IT-Operations Manager of Votorantim Group, explains, “There was no integration between the technology areas of the group. We didn’t have a standard IT landscape, and certainly didn’t have a consolidated view of all the business units. As a result of this, the units communicated ineffectively, and we incurred a loss of operational and decision-making readiness.”

Poor communication between different sectors of the business was not the only pain point for the Group. Its existing databases did not offer the management functionality and performance required, and data storage was poorly optimized.

“Our storage needs were growing by up to 180 GB per month, really driving up the cost of storage,” comments José Evaristo. “Effective data compression in IBM® DB2® version 9.7 would make a major contribution to controlling our storage costs, by reducing the need to buy, implement and manage new storage devices.” Votorantim wished to integrate its information to facilitate greater agility in both company-wide decision making and general operational processes. It also wanted to optimize its existing storage capacity, and improve the efficiency of its IT infrastructure.

Choosing the best solution

Votorantim worked with external consultants to assess the best ERP solution for the company, one that would be able to provide a wide range of general business management and specific operational components. Additionally, the company searched for the best vendor to complete the migration, and identify the right database and IT infrastructure capable of meeting the group’s needs.

“We evaluated Oracle and HP, but when it came to deciding on the partners to consolidate the environments, IBM and SAP really stood out,” explains José Evaristo. “Both are major players in the market, with extremely high technical expertise, very high-quality solutions, and an excellent track record of working in partnership to deliver reliable, cost-effective systems.”

The first step was to change from the distributed to centralized operational model, creating primary and disaster recovery data centers able to serve all 10,000 users. Votorantim worked with IBM to implement an integrated SAP® ERP solution, running on IBM Power® 795 and Power 595 servers running IBM DB2 database software. The primary data center runs the Power 795, while the secondary location runs the Power 595 servers.The program of SAP implementation and subsequent migration of each business unit’s operations was carried out in stages. By 2007, one company in each phase of the group was part of the SAP system.

José Evaristo comments, “Overall, it was a smooth transition, and it has set a standard which guarantees continuity, evolution and the support of technologies for our business.”

Working with IBM and Votorantim, IBM Business Partner TIVIT assisted in system sizing, implementation and deployment. TIVIT continues to provide system administration, support and maintenance services, including backup and disaster recovery services.

Comprehensive business management with SAP ERP

Votorantim has deployed an extensive suite of SAP software, both on the general management and on the operational sides of the business. Applications include Financial Accounting, Controlling, Asset Management and Treasury management, Strategic Enterprise Management (SEM®), and Customer Relationship Management.

Votorantim also chose to implement SAP Governance Risk and Compliance, SAP NetWeaver® Business Warehouse, SAP BusinessObjects™ Financial Consolidation, and SAP BusinessObjects Planning and Consolidation. With this comprehensive set of applications, Votorantim is able to manage every aspect of the business, from sales through to strategic planning, based on integrated data held in IBM DB2, processed efficiently, reliably and rapidly by the POWER7® processor-based Power 795 servers. On the operations side, Votorantim uses a range of process-oriented applications, including Production Planning, Materials Management, Sales and Distribution, Project System, Quality Management, Logistics Execution System and Warehouse Management. Data from these applications is captured and fed straight into the financial systems, offering operational, financial and management executives a validated, accurate view of integrated operations.

Power from the center

Switching to a centralized, standardized SAP application landscape has dramatically simplified Votorantim’s IT operations and enhanced information flows throughout the organization. All the business units, in Brazil and abroad, follow the same process workflows and base decisions on shared, accurate data. The SAP applications and IBM infrastructure allow the enabling technologies to deliver cost-effective IT services to the Votorantim Group.

For the business as a whole, the move towards a homogenous platform has been of key importance. “The strategic benefits we’re seeing are a lot greater than we’d initially anticipated,” says José Evaristo. “As a large group, it goes without saying that by maximizing the utilization of our IT resources in this way we gain better value through favorable economies of scale. What we didn’t predict was how much the increased alignment of business and IT strategies would strengthen the group. Now we have a situation where the industrial side of our business is applying improved IT skills to deliver better value, and the IT team is using their improved corporate awareness to hone our systems in pursuit of mutual business goals. None of this would have been possible without the SAP solution.”

Gaining the benefits of DB2

Thanks to IBM DB2, Votorantim has increased availability by two hours every month.

José Evaristo says, “What we are able to do now, which was impossible before, is get the maximum value out of our IT resources. With the help of IBM, our SAP suite can now support approximately 4,000 concurrent users, and the whole user base amounts to over 10,000 individual accounts accessing some 22 TB of data. Our IT infrastructure is fully integrated across our business.”

“DB2 row compression functionality has resulted in a 40 percent storage saving, which reduces the pressure to acquire and manage more storage devices. With smaller production data volumes, we have reduced the backup time and cost, which also tends to improve our resilience as we can run more backups more frequently.”

Building the integrated enterprise

With the implementation of the Shared Technology Center using SAP and IBM technologies, Votorantim has reduced or eliminated many of the local units’ IT costs. The shared services center is more cost efficient and provides greater information quality and availability at a lower cost per user. Executives requesting management reports can be satisfied that the underlying data is correct, which helps them to understand the business more fully and make better-informed decisions.

José Evaristo concludes, “Between the functionality we’ve now gained through the centralized SAP and IBM solution and what we did before, there’s just no comparison.”

Products and services used

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

Hardware:
Power 595, Power 795

Software:
AIX, DB2 for Linux, UNIX and Windows

Operating system:
AIX

Service:
IBM-SAP Alliance

Legal Information

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