age of the opening of utility markets. IBM is ramping up its enterprise resource planning (ERP) activities by targeting vertical industries in the global utility and energy sector.
The company is investing an undisclosed amount to create four Centers of Excellence in Tokyo, Stuttgart, Sao Paulo and New York. IBM's Global Services arm is deploying over 8,000 staff to ERP scoping, planning, installation, integration and maintenance.
IBM's Centers of Excellence will offer process and core business application templates. The aim, according to IBM, is to tackle three main issues: time to benefit, return on investment and cost of ownership.
IBM is taking advantage of the opening of utility markets. "As utility and energy services companies become privatised and compete in a deregulated and global marketplace, they need to reengineer core business processes, and ensure that they are efficient and cost-effective," explained Curtis Tearte, IBM's general manager of Global Utility and Energy Services.
Tearte said this requires "a vast range of business and technology skills, from front-end consulting and application development and hosting, through to integration, support and financing."
IBM claims to be uniquely positioned to provide these services, and Tearte cited a recent SAP implementation at the world's largest utility, Electricite de France - Gaz de France (EDF-GDF).
IBM helped implement a SAP costing system comprising 2,600 SAP licences across 21 companies. Completed earlier this year, 800 were installed at seven companies during 1997.
The implementation coincided with the reorganisation of EDF's infrastructure divisions, differentiating them from the operational divisions which became separate profit centres.
Roland Brette, EDF-GDF project manager said this was the company's first large-scale ERP project.
He added: "IBM not only succeeded in the technical area but also on the change-management programme. Deadlines were consistently met and users were operational on the new system right on schedule. The transition from the old system to the new was carried out without problems and the whole system was running smoothly within three months."
Remarkably for a large ERP system, project targets were met, costs were 25% lower than forecast and the IT systems are claimed to be six times less expensive to run than before. Brette said the return on investment is kicking in 18 months earlier than anticipated.
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