Following divestiture from its parent company, PeroxyChem had just 12 months to take over management of its business systems. How could it avoid the cost and risk of building its own infrastructure?
PeroxyChem chose IBM to migrate and manage its key SAP and non-SAP applications in the IBM Cloud — minimizing capital investment and business disruption, and going live in four and a half months.
Reducescost and risk by avoiding large capital investment during divestment
Supportsglobal business operations with 24/7 availability
EnablesPeroxyChem to focus on developing innovative products
Business Challenge Story
Targeting the benefits of divestment
Divestment can be a highly effective method to help enterprises gain the focus, agility and control required to drive growth and increase shareholder value—but the process can also carry significant risks. How can newly independent businesses minimize capital spend during the all-important first year of operation?
This was precisely the challenge facing PeroxyChem, a leading chemicals manufacturer. The company had spun off from its parent company. As part of a large corporation, PeroxyChem had not been responsible for managing or maintaining its own IT systems—but it now needed to become self-sufficient quickly.
Jim Curley, Chief Information Officer at PeroxyChem, elaborates: “Our previous parent company signed a transitional service agreement [TSA] to continue providing our business systems for 12 months after the divestment. We had a very short time to set up our own IT support structure without disrupting ongoing operations, and delaying simply wasn’t an option. Not only would it have been costly to extend our TSA, it would also have obstructed our strategic move towards new products for specialty industries such as electronics and food safety.”
For many years, PeroxyChem had relied on SAP ERP applications to support its business processes from end to end. With the divestment process well underway, the pressure was on to find a cost-effective, scalable platform for the critical SAP business systems.
Jim Curley continues: “As a newly independent company, minimizing capital spend is key—and it simply didn’t make sense for us to build an on-premises data center and maintain it ourselves. From the outset, we aimed to keep our IT department lean and focus on building new services for the business, rather than worrying about keeping the lights on. To solve the challenge, we looked for a trusted provider that could deliver our mission-critical SAP applications as a managed service.”
Partnering for success
PeroxyChem initially considered four different providers, but quickly saw that IBM was the optimal fit for its operational requirements. IBM had delivered infrastructure services to PeroxyChem’s previous parent company in the past, and was familiar with PeroxyChem’s SAP ERP application landscape. Even more importantly, IBM offered an end-to-end solution that addressed all of PeroxyChem’s IT needs.
“We wanted to simplify our IT management as far as possible, so a single-vendor solution was a key requirement,” recalls Jim Curley. “For example, we didn’t want to have engage another company to support email or run a helpdesk. IBM offered us a central point of contact for all our infrastructure and support—enabling us to deliver enterprise business systems with a lean in-house team.”
PeroxyChem, working together with IBM Cloud. IBM also helped implement a host of additional applications—SAP Enterprise Portal, SAP BI, SAP BW, SAP Process Integration, SAP SEM: BCS, and SAP Solution Manager— configuring functionality according to PeroxyChem’s business requirements.
The systems were rigorously tested during deployment on the IBM Cloud. Unit test, multiple integration test, system integration test, and user acceptance test were performed to guarantee that all systems were working as required by PeroxyChem. Mock cutover was carried out on a pre-production system, and a detailed transition plan was developed, ensuring that the actual cutover for production systems went smoothly.
“We knew we were working to a tight deadline: by the time we kicked off the project with IBM, we only had four and a half months before we needed to go live. Nevertheless, throughout the project our support from IBM was nothing short of exemplary,” says Jim Curley. “Whenever we faced a technical challenge, the IBM team did a fabulous job coming up with really innovative workarounds to make sure the SAP migration went smoothly.
“IBM’s philosophy was always: ‘what’s best for PeroxyChem?’ They weren’t constantly going back to the word of the contract to check what was in or out of scope—they listened to the challenges we were facing and helped us to solve them quickly.”
Thanks to a creative deployment schedule which saw multiple phases being implemented in parallel overlapping timelines, PeroxyChem achieved its challenging go-live goal. Jim Curley comments: “Owing in part to the expert assistance we received from the IBM team, we ended up completing our migration in just three and a half days over a holiday weekend—a whole business day sooner than we had planned for. The entire project took just over four months, so when our TSA expired, we were more than ready to drive our business systems ourselves.”
Controlling costs, minimizing risk
By migrating to a cloud-based managed services solution from IBM, PeroxyChem has eliminated the cost of building an on-premises data center, and is realizing substantial savings as a result.
Jim Curley explains: “Starting out as an independent company, we were keen to limit risk by keeping capital expenditure as low as possible. Trusting the IBM Cloud to take care of our SAP platform has enabled us to avoid the significant expense of an in-house infrastructure.
“The scalability of the IBM Cloud is also a huge advantage. During the first 12 months we did some divestments of our own, and when we reduced the number of users on our systems we achieved immediate operational cost savings.”
He continues: “The transparency that the IBM Cloud offers is superb. I can now tell the Management Team: ‘this is how many accounts we have, and these are our operational costs going forward’. Likewise, as PeroxyChem grows, we can easily add more users without the cost and complexity of purchasing additional compute, storage and networking resources.”
With its SAP solutions delivered as a managed service, growth is on the horizon for PeroxyChem.
“While IBM takes care of maintaining our infrastructure and support, our IT team is free to focus on developing new projects and services for the business—helping us drive our expansion into new specialty markets,” says Jim Curley.
“Before the divestiture from our parent company, we were used to simply working with what we were given. But now we can go to our employees, ask them what they need to be more efficient and then IBM can help us utilize our SAP systems to achieve it – for example, we’ve been able to streamline operations by automating numerous previously manual processes. Boosted efficiency, combined with the outstanding SAP solution expertise provided by IBM, substantially shortens our time to market for new business-facing services.”
Jim Curley concludes: “Running our SAP applications on the IBM Cloud is proving to be a reliable model. We stabilized our SAP environment in just two months, and the availability and performance of the IBM Cloud is practically faultless. Our Board of Directors has commented several times about how consistently boring our IT operational reports are—we never have any impactful outages or issues to tell them about!”
About PeroxyChem LLC
PeroxyChem is a leading global supplier of peroxygens and adjacent chemicals to numerous specialty, industrial and consumer markets. The company employs approximately 550 people, with manufacturing facilities in North America, Europe and Asia.
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