Case Study by EBEX Services Ltd

Migration from Oracle to SAP

This case study illustrates the EBEX capability of strategic on-boarding of a large enterprise (new client) from a different platform to SAP ERP, simultaneously on the shared service platform. Within the short span of 3 month, the task was not only to migrate the ERP and onboard the processes, but to also implement GST and ensure minimal business disruption.

Team EBEX not only achieved this feat without any external support, but also transitioned the entire P2P process of the client from traditional to digital platform.

Who was the client

Client

A successful venture of a huge Indian conglomerate, with many prestigious and successful infrastructure projects undertaken and executed completed at national level. The business has 6 verticals and 3 SBUs comprising of order book value USD 4.7 billion i.e. close to 31,490 Crore INR and a footprint in more than 17 states and across 100+ cities.

What was the earlier process

Old Situation

As the scale of operations grew with 1500+ employees, need of process driven standardization across non-core functions was being felt. Using Oracle ERP(R12 Version 1.3) in combination of other non-SAP applications for managing their day to day operations, it was being difficult to remain on same platform with other group companies and even a small consolidated report at group level required an extra un-necessary effort. Moreover, due to multiple in house isolated applications, with limited in house technical capabilities, dependency on vendors increased as the shared service center serving other group entities could not extend support.

What were the challenges

The Challenges

Mainly the following pain areas were identified which intensified the need of migration:

  • Different ERP with different structure of data
  • Different business verticals and discrete processes
  • Non scalable and obsolete infrastructure
  • Under utilized manpower and missing Transaction Trails
  • High Maintenance Cost
  • Lack of Reporting & Consolidation procedures
What was the approach taken

The Approach

With other group companies already on the shared service model with EBEX as a service provider (captive shared service unit of Essel Group), the first and obvious choice was to migrate to SAP and then to the allied workflows and common processes.

To start with, baselining of the current processes was done and KPI’s were defined – for quantitative as well as qualitative parameters. Business buy in was obtained, stake holders were aligned, blueprints were prepared and a case study was presented to the top management.

Keeping in view the GST rollout dates, which coincided with the transition plan, the project required meticulous detailing, and there was no scope for delays. With multiple line of businesses in scope, and many stakeholders involved, the stakes were as high as the complexity of the project.

Few KPI’s identified for measurement were:

  • Cost of project - Implementation as well as Operational
  • Efficiency & Productivity
  • Controls
  • Visibility and Audit Trails
  • Turn Around Times - TAT

After thorough brainstorming, it was concluded to start the journey with core modules only, and then implement the add on modules in a phased manner , to be completed in 20 weeks (Finally we achieved before time completion, in 16 weeks).

Time schedule for migration from Oracle to SAP

Solution suggested by EBEX, the BPM shared services provider

The Solution

The overall solution aimed at not only to bring the business in-line with other businesses of the group, but also to bring in excellence and financial process automation to a maximum possible level. The activities undertaken were:

    • Adoption of the Standard policies and practices of the unified processes at group level.
    • Stand alone, smaller applications disseminated into 1 core ERP system – which is SAP, giving many direct benefits:
      • Maintenance and development costs for these applications was a direct saving
      • Dependencies on vendor resources eliminated
      • Single source of data / reports reduced the reconciliation issues
      • Book closure and consolidation became easy - in total 125 legal entities
      • Easy to do consolidation at group level
      • Faster decision making at management level
    • Inhouse team did the implementation, this not only crunched the timelines, but also total cost of implementation was just a fraction of what was quoted by the external vendors. Common pool of user licenses was utilized
    • GST Compliant system – GST compliant SAP was implemented, direct savings in the change requests for doing the same in the old ERP
    • Shift to the existing SAP landscape also meant all the back-end infrastructure and hardware becoming common. This not only released the servers for other use, but also saves on the recurring annual maintenance cost, hosting charges, etc
    • Improved Productivity – 15 - 20% productivity improved due to process re-engineering and automations, which were manual earlier. Centralization at the shared service also resulted in scalable and process oriented transactions along with audit trails

    SAP replaced the following software:

      • Oracle R12 Version 1.3
      • Database version 11.2
      • VHD – vendor helpdesk
      • VITS – Vendor portal
      • WAM – Work & asset Management
What were the results achieved

The Results

Specific benefits achieved after the on-boarding of the business with SSC environment at EBEX are:

  • Unified processes across group- All entities are in same server and client, everything is available in single system. The processes are common. Outputs are defined and predictable
  • Centralization of non-core activities at Shared Service - Entire procure to pay cycle is centralized at shared service of the group including ERP support and legal services. As on date, we have also onboarded other processes like payroll, record to report, and Talent Acquisition
  • Removal of redundancies, Improved Productivity, Cost reduction – all the initiatives at group level are automatically implemented for the company without additional cost, Same is with the statutory & compliance related requirements. For example, GST implementation, general terms & conditions in PO, standard payment terms. License cost has reduced. As the support team is common, time involved in any new rollout is minimal
  • Segregation of Duties, Defined roles and responsibilities - Access to SAP t codes are restricted, and are controlled by the central team. As the processes has been centralized, at least 40% user IDs have been reduced. Maker checker concept has been introduced in EBEX processes, which ensures accuracy, and avoids conflict of interest
  • Benefits of synergies / volumes / purchases at group level - By virtue of being on common platforms, the negotiation with vendors for common spend like IT, Marketing, Admin related items are now done for bulk volumes by a centralized team, which has given 10-15% savings as compared to old cost. Reports on last procurement, vendor performance are available centrally which helps in efficient buying

Other short-term or immediate project benefits achieved:

  • Savings - On implementation of GST related changes
  • No procurement of user licences (used from the common pool)
  • No implementation cost - done by Shared service team

Overall project resulted in immediate savings of around 3Cr

Value Creation by EBEX, for Essel Infra as a client

Value Creation

Business benefits achieved/likely to be achieved by this project against each Key Success Factor are:

    • Vendor relationship : Centralized Master data team ensures the KYC of vendors is compete, system generated intimation at each stage of the transaction whether its release of PO, or receipt of invoice or release of payment. Online payment integration with banks reduced the timelines for vendor getting his dues. Overall increase in visibility, transparency, vendor satisfaction and reduction in queries / anxiety in the entire system.
    • Reporting : Consolidated MIS vertical wise, real time visibility on state of affairs. In earlier scenario, all reports were having multiple sources, which not only took time to compile, but also made the information redundant due to time taken in generating the same. Now the transactions are online across locations – real time visibility is made possible.
    • Financial controls : Maker checker at each stage, Segregation of duties, 3 way check on vendor invoice processing, controls on non PO cases, Auto closure of PO after delivery due date are few things which brought system controls which were either manual earlier or missing. Discipline in closing the books timely, targeting to close max by 7th of subsequent month. Business planning and consolidation module is on the 1 year roadmap, which will further improvise the business controls.
    • Manpower rationalization : Generally, every person was assigned multiple roles. Apart from conflict of interest, there were hidden inefficiencies also in the old arrangement. Now after moving to the shared service model, wherein each person has a defined role only, we could achieve a great degree of rationalization. More importantly, being on the same set up of that of the group, most of the support functions are now common, which effectively reduced the overall manpower by 15-20%.
    • First time right : Maker / checker concept, focusses on reducing errors, resulting correct returns being filed in the first time only to govt. authorities, reduced on compliances and defaults.
Innovations carried out by EBEX as the Shared Services Provider

Innovations

    • Digitization and Automation – Various efficient processes implemented
    • Invoice scanning, posting and processing – literally a paper less office environment. The bill desk function scans the invoices / claims and sends the same for archival at 3rd party at a offsite location. Soft copies are auto attached to the SAP document no. making it available at a click, Saves a huge sum in terms of storage and safekeeping of documents locally, especially in terms of office space.
    • Online Employees travel expenses and reimbursements
    • Online Payments – integration with banks
    • Integration –with non- SAP applications and workflow. Currently SAP is tightly integrated to P2P workflow, Human Resource Management System, Vendor portal, Document Management System, Essel Intranet.- reduces data entry efforts and removes redundancy
    • Reusable components – Adoptability of best and already tested solution helps the team to meet the project deadline in record time. In the given case, external vendors have given a timeframe of 9 months for implementation, but same has been done in just 3 months with GST by inhouse SAP team. In effect, rolling out changes to the processes, or additions of new org units takes considerably lesser time and efforts.