Monday, 13 December 2010 17:49

Why Dematic chose Infor over SAP


When materials handling solutions provider Dematic was divested from Siemens, the Asia Pacific operation had to make a quick decision concerning ERP software. Four years later, it doesn't regret the choice it made.

Logistics systems supplier Dematic has a roster of well-known customers in Australia including Woolworths and Coles. It also has an interesting history in this country, starting out as Colby Handling Systems in 1966, being acquired by Mannesmann in the early 1991, becoming part of Siemens in 2000, and then being divested into the hands of German private equity firm Triton in 2006.

The local operation (which covers Australia, New Zealand, Singapore, Malaysia, China and Thailand) began using software that is now part of the Infor range since 1991. It had upgraded to Syteline 4 prior to being acquired by Siemens, but was then required to switch to SAP.

When it parted from Siemens, the company was given 90 days to decide whether or not to stay with SAP, and to act on that decision.

CIO Allan Davies told iTWire that the company was given the option of buying more time by cloning Siemens' SAP system and continuing to use that for 12 months, but that would have costs around $3 million.

The choice was basically between staying with SAP and returning to Syteline. The respective licensing costs would be $600,000 or $100,000 per year, so once Infor regional vice president James Brackenrig committed to a Syteline implementation in the 73 days that remained, the decision was made.

Did the project succeed? Find out on page 2.

The project went ahead and the deadline was met, despite some problems in China caused by local complexities and the need to provide extra training for the regional offices that had no previous experience in running their own ERP system.

"SAP is a unique system" said Davies, and one that was a great fit for Siemens - but smaller companies need more flexibility, and Dematic gets that from Syteline.

Over time, the company installed more Infor software.

The PM 10 corporate performance management application allowed Dematic to replace a cumbersome planning and budgeting system involving 33 Excel spreadsheets in just two days. The software has now been adopted globally by the group, including the regions that chose to stay with SAP.

Dematic previously outsourced its expenses management system to Siemens, but this was an expensive proposition at around $45,000 per year. The company installed Infor's XM at an annual licensing cost of $14,000, and gained a simpler system with good integration with the ERP software including easy allocation to specific projects.

"That saved us an enormous amount of labour," said Davies. Another advantage was XM's ability to accept data feeds from Visa and Amex.

The XM implementation was expected to show a return o investment in 18 months, but that was achieved in a year.

What of the future? Please read on.

Davies speaks highly of Infor - the company doesn't 'live in his pocket' chiseling away for orders, but behaves like a genuine partner. For example, Syteline was previously unable to recognise revenue when project milestones were reached, so the two companies jointly developed a module to to the job and the functionality is now part of the core product, he said.

He welcomed Infor's ION strategy for providing a common user interface and integration among its products. As Dematic uses three Infor products, it "is of real interest to us," Davies said.

"It's certainly something we're keeping a close eye on," he said, adding "we're keen to see what comes to market" as far as Infor's mobile apps are concerned.



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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.



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