Eletrobras Termonuclear SA solves company fusion challenges with SAP and IBM

Published on 12 Aug 2011

Validated on 06 Dec 2013

"SAP application servers supported by DB2 on IBM System z are the ideal combination for Eletronuclear. We gain the advantages of scalability and security for our data, which enable us to use the flexibility and functionality of SAP applications to deliver excellent business results for Eletronuclear." - José Ferreira, Corporate Manager of SAP System, Eletronuclear

Customer:
Eletrobrás Termonuclear SA

Industry:
Energy & Utilities

Deployment country:
Brazil

Solution:
IT/infrastructure, Business Integration, Business Resiliency, High Availability , Information Governance, Information Infrastructure, Information Integration, Optimizing IT, Workload Management

IBM Business Partner:
SAP

Overview

Eletrobrás Termonuclear SA (operating as Eletronuclear) was established in 1997 for the purpose of operating and building thermal nuclear power plants in Brazil. The company was created when Nuclen merged with FURNAS Centrais Elétricas, the directorate of nuclear power operators in Brazil. A subsidiary of Eletrobrás, Eletronuclear is a government-controlled company that is the exclusive generator of nuclear-fueled electric power in Brazil. The company currently operates two nuclear power plants, with a third planned for 2014.

Business need:
When Nuclen merged with the directorate of nuclear power operators in Brazil, FURNAS Centrais Elétricas, challenges associated with financial, payroll and process integration were delaying the delivery of critical management information. The company wanted to eliminate manual processes and accelerate information flows, but existing infrastructure was running short of capacity.

Solution:
Eletronuclear implemented IBM System z9 Business Class servers to run its SAP ERP applications, including financials, payroll and SAP BusinessObjects governance, risk, and compliance solutions (SAP BusinessObjects GRC solutions), with IBM DB2 for z/OS as the supporting database. The company consolidated multiple databases to the central IBM DB2 instance, with shared information available to all applications and services. IBM Tivoli Storage Manager was implemented to provide SAP application data backup/recovery, including archive and restore services.

Benefits:
Reduced payroll processing from 20 to five days, which means that the payroll can be based on an up-to-date employee register with fewer revisions for leavers and joiners and no manual errors. Salaries are paid automatically direct to the employees’ bank accounts on the due date, reducing payment clearing time from five days to one - an 80 percent reduction. Pension fund allocations are handled automatically, with employee contributions assigned direct from payroll systems, eliminating delay and error. Cut month-end close from two months down to five days - a 90 percent reduction.

Case Study

Eletrobrás Termonuclear SA (operating as Eletronuclear) was established in 1997 for the purpose of operating and building thermal nuclear power plants in Brazil. The company was created when Nuclen merged with FURNAS Centrais Elétricas, the directorate of nuclear power operators in Brazil.

A subsidiary of Eletrobrás, Eletronuclear is a government-controlled company that is the exclusive generator of nuclear-fueled electric power in Brazil. The company currently operates two nuclear power plants, with a third planned for 2014.

Eletrobrás itself is the largest generator and supplier of electricity in Latin America. The company is majority-owned by the Brazilian federal government and generates some 37 percent of the country's power supply. Eletrobrás owns 15 subsidiary companies involved in the generation, transmission and distribution of electricity, and is active not only in Brazil and the rest of Latin America, but also in several African countries. In total, Eletrobrás generates just under 40,000 megawatts of power and operates 60,000 km of transmission lines.

Business challenges and project objectives
SAP ERP software is a crucial tool to support the day-to-day running of the Eletronuclear business. It is used in practically all operational areas: financial controlling, accounting, sales, treasury, human resources, and more.

Eletronuclear originally started using SAP software for enterprise resource planning in 1998, deploying version SAP R/3 4.0b. In 2008, Eletronuclear opted to upgrade to the latest version of SAP ERP, and elected to host the new solution on the IBM System z mainframe platform. As part of this system update, some additional areas of the company that had continued to use legacy software developed in-house were migrated to SAP.

“There were three key reasons for choosing IBM System z as the database platform for our SAP ERP environment, running on Intel and AMD x86 processor-based servers. Our accumulated experience with the platform, the high levels of security and reliability, and the excellent integration with SAP gave us compelling reasons to choose System z,” says José Ferreira, Corporate Manager of SAP System, Eletronuclear.

“There was also a desire to have IBM DB2 on the mainframe at the heart of the solution. Indeed, part of our original reason for choosing SAP was that it worked well with DB2, which we have used since 1986,” says Paulo Cesar do Nascimento, Senior IT Specialist at Eletronuclear.

The migration to the newer version of SAP was completed by the Eletronuclear internal team working with an external consulting company, Politec Global IT Services.

A key challenge for Eletronuclear was completing financial operations reliably, particularly the group-wide payroll processing and month-end financial reporting, which were delaying the delivery of critical management information. The company wanted to eliminate manual processes and accelerate information flows, but existing infrastructure was running short of capacity.

Paycheck processing is highly regulation-dependent in Brazil, and for related reasons Eletronuclear selected the SAP ERP Human Capital Management and the SAP BusinessObjects governance, risk, and compliance (SAP BusinessObjects GRC) solution components.

The combined workload of the new SAP applications and a more general update to the latest SAP ERP software placed new demands on the supporting database infrastructure, and Eletronuclear set about reviewing its strategy.

Looking at possible alternatives, Eletronuclear chose to update its existing database server to an IBM System z9 Business Class server, running z/OS 1.9. The company plans to upgrade to z/OS 1.12, and is currently testing this release on non-critical workload.

Payroll and governance
With all the company data in a single place, it now made sense for Eletronuclear to take advantage of the integration and automation functionality possible with SAP software. The company implemented SAP ERP Human Capital Management, with its payroll and pensions management components.

As a direct result of using integrated SAP components and DB2 on the System z platform, Eletronuclear has cut its payroll processing from 20 to five days – a 75 percent reduction. Current employee data is held within DB2, and the data, such as hours worked and pay rate, is delivered to the payroll processing engine which automatically calculates net pay and pension contributions. The financial results are passed to the SAP financials applications to update the company’s general ledgers, and the totals are passed to the SAP treasury component to update the corporate cash flow data. Finally, salaries are paid automatically direct to the employees’ bank accounts on the due date, reducing payment clearing time from five days to one – an 80 percent reduction. The automated pension fund allocations ensure that contributions are assigned direct from payroll systems, eliminating delay and error.

With integrated management of data within the SAP and DB2 environment, month-end financial closing has been cut from around two months down to five days, a 90 percent absolute reduction saving 35 working days, eliminating manual transfer of data.

Because payroll and other operational data are so sensitive, Eletronuclear also implemented SAP BusinessObjects GRC solutions to control and audit every access and interaction with the data. SAP BusinessObjects GRC solutions are designed to close the gap between strategy and execution, enabling a real-time approach to GRC with reports on access, interaction and changes to data.

Optimizing database workload
Eletronuclear uses an IBM System z Integrated Information Processor (zIIP), a special-purpose engine designed to take DB2 workload from the central processors (CPs). The zIIP handles around 59 percent of the workload that was previously run on the CPs, reducing the software license costs for Eletronuclear by placing the processing workload on the most cost-efficient platform.
The IBM System z Integrated Information Processor (zIIP) is available on all IBM zEnterprise (zEnterprise™), System z10, and System z9 servers. It is designed to help free-up general computing capacity and reduce their overall total cost of computing for select data and transaction processing workloads.

The ease and economy of this solution helps break down the walls between transactional data stores on the mainframe, and the applications that run on distributed computers. The System z helps to minimize the need to maintain duplicate copies of the data and provides enhanced security between the applications and the data.

Importance of high availability
With up to 3,000 employees reliant on SAP to perform their jobs as well as the larger community relying on the payroll and human resource services, it is crucial for Eletronuclear to keep the system available at all times. The company allows 40 hours of scheduled downtime each year for system maintenance, and has never had any unplanned outage.

Eletronuclear runs Tivoli Storage Manager to automate its backup, archive and recovery processes from a single point of control, helping the company manage its very large data volumes cost-effectively. Tivoli Storage Manager provides data de-duplication and storage hierarchy to help increase efficiencies and conserve resources, and includes innovative access and encryption features to improve security.

Using Tivoli, application servers are automatically backed up on a daily basis to 3592 tapes on an IBM System Storage 3494 Tape Library. Each application server backup takes about 30 minutes to complete, and the native compression technology enables a compression ratio of 3:1.

“We have just a single administrator for the mainframe environment,” says Ferreira. “It's difficult to imagine a platform other than IBM System z where you could have such exceptional reliability without an army of administrators.”

To support administration services, Eletronuclear deploys OMEGAMON XE to provide comprehensive information about components such as Workload Manager, Coupling Facility, Cross System Coupling Facility (XCF), Global Enqueue, and shared DASD. OMEGAMON provides usage and reporting support for the zIIPs, enabling Eletronuclear to optimize its zIIP workload to help manage software costs.

Operating as a single enterprise
Eletronuclear operates a worldwide business as a single enterprise, with the power of an integrated SAP environment and consolidated data management supported by IBM DB2 on the IBM System z platform.

José Ferreira concludes, “SAP application servers supported by DB2 on IBM System z are the ideal combination for Eletronuclear. We gain the advantages of scalability and security for our data, which enable us to use the flexibility and functionality of SAP applications to deliver excellent business results for Eletronuclear.”

Components

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

Hardware:
Storage, System z, System z: System z running z/OS, System z: System z9, System z: System z9 Business Class (z9 BC)

Software:
DB2 for z/OS, Tivoli OMEGAMON XE on z/OS, Tivoli OMEGAMON XE for DB2 on z/OS, Tivoli Storage Manager, Tivoli OMEGAMON XE for DB2, Tivoli OMEGAMON XE for CICS on z/OS

Operating system:
z/OS and OS/390

Service:
IBM-SAP Alliance

Legal Information

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