Sabah Credit Corporation satisfies investors

Published on 27-Sep-2012

"By working with IBM and SAP, we have gained the partners we need to support our business both now and in the future. IBM in particular has shown a great commitment to the State of Sabah, providing a level of local support that other major vendors are often unable to match. As a result, we are confident that we have made the right decision with SAP and DB2." - Nelson Chan, Head of the IT department, Sabah Credit Corporation

Customer:
Sabah Credit Corporation

Industry:
Banking

Deployment country:
Malaysia

Solution:
Data Serving, Enterprise Resource Planning, High Availability , Small & Medium Business, Virtualization, Virtualization - Server

IBM Business Partner:
SAP

Overview

Sabah Credit Corporation (SCC) is a financial institution fully owned by the Sabah State Government in Malaysia, and operates under the purview of the Sabah State Ministry of Finance. The corporation’s primary objective is to support the socio-economic development of the State of Sabah through the provision or facilitation of financial credit to promote and encourage private investment in agriculture, light industry, housing, commerce, and public utilities and amenities.

Business need:
Providing commercial information to investors and improving process control is a key part of the growth strategy at SCC. Existing solutions were unable to provide the information required, and could not respond to changing business needs.

Solution:
SCC chose to replace its legacy systems and deploy integrated SAP ERP applications, supported by IBM DB2® database software running on the IBM BladeCenter® platform.

Benefits:
SAP applications meet SCC’s need to serve investors, support Islamic banking and offer full integration of operational areas. IBM® DB2 delivers 100 percent reliability, very low maintenance costs and high-performance information management.

Case Study

Sabah Credit Corporation (SCC) is a financial institution fully owned by the Sabah State Government in Malaysia, and operates under the purview of the Sabah State Ministry of Finance.

The corporation’s primary objective is to support the socio-economic development of the State of Sabah through the provision or facilitation of financial credit to promote and encourage private investment in agriculture, light industry, housing, commerce, and public utilities and amenities.

Providing a better service to borrowers and investors
Sabah Credit Corporation raises its funds for lending primarily by attracting investors.

Nelson Chan, Head of the IT Department at SCC, explains, “One of the most important things is to show that our internal systems and processes are suitable for a modern financial institution operating in a competitive market. We also need to be able to comply with changing regulations and adapt to market trends – for example, in the Malaysian banking industry, Islamic finance has become extremely important.

“Our new system assures our investors that we are equipped to deal with these changes in the marketplace, so that they can be confident that their money will be well managed. Additionally, our new system also improves borrowers’ satisfaction by enabling us to offer faster and more accurate customer profiling and loan services.”

Choosing a modern ERP solution
SCC considered ERP solutions from two major vendors – SAP and Oracle. “We like SAP because it can be extended to handle almost every area of the business,” explains Nelson Chan. “Our plan for the initial implementation was just to focus on the key financial areas like accounting, cost controlling, procurement and human resources, but in the future we might want to introduce other modules such as sales and distribution. We felt that with the Oracle option, these additional applications might be difficult to integrate, whereas with SAP there is one cohesive platform.”

Finding the right database platform
The next major decision was to select the database platform to support the new SAP applications. SCC was already using Oracle for its C&W Thaler system, and its in-house team had considerable experience with Oracle, but the company still decided to look at all the options.

“We had a meeting with IBM, and they proposed DB2,” says Nelson Chan. “We had not used DB2 before, but we have been an IBM hardware customer for some years, and our experience with IBM support has always been excellent – they have a great technical hotline and a really good team in Sabah. We also knew that IBM and SAP have a very close relationship around the development of DB2 and SAP ERP. This gave us confidence that IBM would be the right partner and DB2 the right strategic platform for our SAP environment going forward.”

Highly reliable IBM hardware
SCC went ahead with its SAP ERP implementation on IBM DB2, and chose to install the software on IBM BladeCenter HS22 servers powered by Intel Xeon Processor 5600 Series processors, running Microsoft Windows and VMware. The Xeon 5600 Series processors offer industry-leading performance and energy-efficiency, with the ability to intelligently adapt performance and regulate power consumption as workload demands change.

“Running VMware vCenter on the IBM BladeCenter platform gives us a very cost-effective way of ensuring high availability for our mission-critical SAP and DB2 environments,” comments Nelson Chan. “In the unlikely event of a hardware failure, the HA feature can move virtual servers from one blade to another, ensuring business continuity.

“Equally, if we need to do some hardware maintenance on one blade server, we can use vMotion to move workload onto other blades and avoid any downtime. These virtualization features really help us harness the power and flexibility of the IBM BladeCenter platform.”

Sabah Credit runs its Thaler core banking system, from vendor Callataÿ & Wouters, on IBM Power® servers running the IBM AIX® operating system. The IBM Power platform provides a powerful, stable and scalable infrastructure for this business-critical solution.

Gaining expertise in DB2
“Once the SAP environment was fully implemented and working well, we wanted our own team to be able to manage it,” explains Nelson Chan. “So we worked with IBM to transfer the knowledge over to our IT department. We found that after Oracle, learning DB2 was a relatively easy process. The basic concepts are very similar, and DB2 also provides a lot of autonomic features that reduce the amount of database administration required.

“For example, the Oracle database that supports our core banking system requires performance tuning about twice a month – especially if we are moving new code from development into production. Each time, the tuning takes a couple of days, as we have to run logs and work out where performance needs to be optimized. With DB2, we do not need to do this at all – it provides excellent performance with virtually no maintenance at all.

“DB2 is also very reliable – we have experienced no unplanned downtime since we first started using it, which is more than a year ago. The only time we need to take the system offline is for backups, so it can support our users almost 24/7.”

Looking at the latest features
Nelson Chan believes that SCC is still at the beginning of its DB2 journey, and many of its benefits are still to come.

“We know that the latest versions of DB2 have many very advanced features, such as data compression and self-tuning memory management,” he explains. “At the moment we are still working on the basics, but we are excited about the potential of exploring these advanced features in the future.”

Gaining significant benefits
Nevertheless, the corporation is already seeing significant benefits from the existing DB2 implementation. “The main advantage is that DB2 requires so little maintenance – partly because it does not need performance tuning, partly because of its reliability, and partly because the SAP DBA Cockpit makes it so easy to use with SAP,” he comments. “The result is that we have not needed to hire a new database administrator to manage the system, which means we are saving approximately 100,000 Malaysian Ringgit (or US$35,000) per year.”

Meeting investors’ expectations
With the rock-solid DB2 platform supporting the new SAP environment, SCC now has the modern, flexible and reliable ERP environment it needs to convince investors about the soundness of its systems and processes.

“By working with IBM and SAP, we have gained the partners we need to support our business both now and in the future,” concludes Nelson Chan. “IBM in particular has shown a great commitment to the State of Sabah, providing a level of local support that other major vendors are often unable to match. As a result, we are confident that we have made the right decision with SAP and DB2.”

Products and services used

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

Hardware:
BladeCenter, BladeCenter HS22, BladeCenter running hypervisor - VMware, BladeCenter running OS - Windows

Software:
DB2 for Windows, DB2 for Linux, UNIX and Windows

Service:
IBM-SAP Alliance, Software Services for Information Management

Legal Information

© Copyright IBM Corporation 2012. IBM Malaysia Sdn Bhd, 19th Floor, Plaza IBM, No. 8, First Avenue, Persiaran Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan. Produced in Malaysia. September 2012. IBM, the IBM logo, ibm.com, AIX, BladeCenter, DB2 and Power are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at: ibm.com/legal/copytrade.shtml. Intel, the Intel logo, Xeon and Xeon Inside are trademarks of Intel Corporation in the U.S. and other countries. References in this publication to IBM products, programs or services do not imply that IBM intends to make these available in all countries in which IBM operates. Any reference to an IBM product, program or service is not intended to imply that only IBM’s product, program or service may be used. Any functionally equivalent product, program or service may be used instead. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. IBM hardware products are manufactured from new parts, or new and used parts. In some cases, the hardware product may not be new and may have been previously installed. Regardless, IBM warranty terms apply. This publication is for general guidance only. Photographs may show design models.