Eircom
Implementing e-business with SAP an interview with Eircom
- Fergal Brazer, e-business Programme Manager, Eircom
- Dev Gupta, Head of Procurement, Eircom
- Mary Pentoni, Business Analyst
- David Laird, Managing Director, Datapac
(a supplier of Eircoms)
Fergal Brazer, e-business Programme Manager,
Eircom
Eircom is the major provider of telecommunication services
in Ireland. It has a turnover of 2 billion Irish pounds and
employs thirteen thousand people. We had a legacy of a
variety of systems but some time ago the decision was made to
integrate all of our financial systems.
Mary Pentoni, Business Analyst
We have R/3 as our back-end system. It has been here about
two years. We have implemented different modules from time to
time.
Fergal Brazer, e-business Programme Manager,
Eircom
Initially it was FI, as SAP people say, and that has been
followed by MM which we call stock. We have also implemented
HR. From our point of view, in terms of using SAP throughout
the business, it gives us very much an integrated approach
and good visibility of whats happening throughout the
business.
Mary Pentoni, Business Analyst
I think the main benefit of implementing a system like SAP
is that its a fully integrated system so all the information
is easily available to people and its real time
solutions.
Dev Gupta, Head of Procurement, Eircom
The biggest benefit we got out of SAP was visibility. We
can put up contracts now onto SAP. Weve got full stock
control right across the country, and the integration back to
the financial systems.
Mary Pentoni, Business Analyst
It also helped us to get our procurement under control. We
found that to be a great benefit to us.
Dev Gupta, Head of Procurement, Eircom
When I joined Eircom, procurement was viewed as a
completely administrative activity. One of the first things I
did was transform the organisation into becoming more of a
value-added organisation from a strategic role perspective.
Behind that, obviously I needed the systems and tools to help
facilitate this dramatic transformation. Thats where SAP
plays its key role for us.
Fergal Brazer, e-business Programme Manager,
Eircom
Our vision at the start was to basically enable, to use
that clich, right through the whole process or cycle to
effectively let people buy from catalogues, send the order
electronically to the vendors as a result of their buying
decision, get the goods delivered and then to present the
invoice electronically. Procurement is one of the focuses we
have. It is seen as very much a part of the strategic
sourcing initiative we have in place. We are looking at
seriously rationalising our supplier base.
Dev Gupta, Head of Procurement, Eircom
To give you an example, I inherited twelve thousand
suppliers as a supplier base over here, and weve rationalised
it down right now to little over four thousand.
Mary Pentoni, Business Analyst
We wanted as a company to try to use the Internet to bring
benefit to our procurement and we aimed specifically at the
non-stock end of our procurement, our MRO items. These are
items that traditionally we dont have an awful lot of control
over. These are what people want to buy: stationary and items
like that. Theyre not direct materials for our business.
Fergal Brazer, e-business Programme Manager,
Eircom
We had a significant amount of maverick purchasing people
buying from their own suppliers. We wanted to get cost
reduction but also facilitate and move towards a much more
focused buying of goods within the total organisation. When
we looked at what was available in the marketplace we decided
that BBP from SAP was probably the best benefit for our own
business. Id have to say, as we went through the project that
feeling was confirmed. We then set up a cross functioning
team which involved a number of people from SAP, a number of
people from IT, a number of people from Procurement. When I
say a team, in reality there are only 2 to3 people at any
time from the business, and the same from SAP.
Dev Gupta, Head of Procurement, Eircom
The team has worked fantastically well. If there were a
model that Id be expanding, it would be this team-based
project approach. It engaged the business, it engaged the
Procurement organisation and it brought the technical experts
all under one umbrella.
Fergal Brazer, e-business Programme Manager,
Eircom
The duration of the project from absolute conception to
go-live was eleven months. But in reality from the time of
vendor selection and people hit the ground to going live was
about five months. We found the SAP team very professional
and very committed to the work. We found them flexible where
possible.
Dev Gupta, Head of Procurement, Eircom
B-2-B is fundamental to where we are coming from in terms
of establishing relationships with our vendors.
Fergal Brazer, e-business Programme Manager,
Eircom
As soon as we decided what goods we will be procuring
initially over B-2-B, we then involved the procurement
managers in selecting the suppliers. That process is driven
by the business in terms of cost and quality of goods and
services provided. But we gave the suppliers the opportunity
to also say that they would like them to do B-2-B with
us.
Dev Gupta, Head of Procurement, Eircom
We initially identified five or six vendors whereby our
transaction levels were fairly high, i.e. spend below 650 per
transaction. Our transaction costs, if you look at it just
predominantly through R/3, are close to around 65 per
purchase order. With BBP we are looking at hitting below the
5 per transaction.
Fergal Brazer, e-business Programme Manager,
Eircom
We did find from the vendors that theyre all quite
enthusiastic. In terms of readiness, it varies. It surprised
us that in some cases large suppliers would be very ready and
able to commit to it very quickly and small suppliers would
take a little while. Sometimes it was like that, sometimes
the smaller suppliers were the fastest.
David Laird, Managing Director, Datapac
(Supplier of Eircom)
In Datapac we market computers, computer networks, and
computer consumables throughout Ireland. We have been dealing
with Eircom for about 15 years. They approached us and asked
us would it be possible to set up a business-to-business site
between the two companies. Fortunately within our company,
weve invested heavily over the past couple of years in
forming a team of web developers. We were able to roll those
people in to talk to Eircom immediately and very quickly we
were able to get a site together. We got the impression that
Eircom wanted it to almost move within days rather than weeks
and months. We organised to have a prototype within about 10
days and they were happy with that so we moved on from there.
Its working very well.
Mary Pentoni, Business Analyst
BBP has been very good in terms of developing our
relationship with our suppliers. They wanted to get an
e-presence or they wanted to put their foot into the e-arena
as well.
Fergal Brazer, e-business Programme Manager,
Eircom
The figures appearing throughout the industry are that you
can save up to 90 to95% of the cost of a transaction. Now its
a bit early for us to have figures, but in terms of the
efficiencies of getting orders into our systems and the fact
that theres no longer potential for error, it is certainly
saving a lot of money and time. And the other, I suppose
hidden aspect of it is customer satisfaction. From their
point of view, were a better supplier and they are a happier
customer.
Dev Gupta, Head of Procurement, Eircom
It makes the relationship seamless and it does provide for
the full end-to-end procurement cycle, i.e. from
requisitioning through to approval and final payment.
Fergal Brazer, e-business Programme Manager,
Eircom
What we have done is identified the key users within the
organisation for the vendors we have already introduced.
There are about 80 users in total.
Mary Pentoni, Business Analyst
The system is so simple its quite intuitive. If youre used
to purchasing on the Internet on any of the business consumer
sites its the same concept filling your shopping basket,
proceeding to pay.
Fergal Brazer, e-business Programme Manager,
Eircom
For the future were going to progressively roll out the
BBP with our vendors. We are also looking at further
integration into our systems in terms of sourcing goods
internally and were hoping that all 5,000 field personnel
will be able to do stock reservations using SAP BBP. In terms
of SAP.com, we have a number of initiatives within the
company, for example, we are looking at Employee
Self-Service.
Mary Pentoni, Business Analyst
Our feedback from users is that they find it a very simple
system that is obviously what we were aiming for.
David Laird, Managing Director, Datapac
(Supplier of Eircom)
Its been a great team effort. Our employees are finding it
great.
Dev Gupta, Head of Procurement, Eircom
The key benefit is basically administration cost reduction
and secondly, payments on time. Its all done electronically.
Thirdly, there are controls around the entire procurement
cycle and fourthly the visibility. Its been well worth our
while.