To make smarter decisions about which commercial opportunities to pursue, Scharff needed faster, more detailed insight into profitability than existing manual processes could provide.
Working with IBM, Scharff moved from slow manual work to slick, digitized processes based on SAP ERP applications, gaining rapid access to profitability figures and becoming smarter and more agile.
20 dayssaved on calculating financial results
Hoursnot weeks needed for bank reconciliations and accounts receivables calculations
EnablesScharff to cherry-pick fresh commercial opportunities
Business Challenge Story
Peru’s economy is flourishing. Since the government introduced substantial free-market reforms, opening the door to foreign investment, the nation has become a hotspot for economic development. International corporations are setting up operations in Peru, and local manufacturers are branching out into new industries and exporting goods across the globe. Formerly centered on Lima, the fruits of economic development and prosperity are now rippling across the provinces.
Wilmer Pineda, Deputy General Manager of Scharff, takes up the story: “Fueled by the recent explosion in trade, demand for logistics services has soared. As a result, we have been presented with a dazzling array of commercial opportunities. To help us decide where to invest and which parts of our business to expand, we wanted a crystal-clear, highly detailed view of profitability across the entire enterprise.
“We knew that our existing finance operations weren’t up to the job. To compensate for shortcomings in our fairly basic tool, we were heavily dependent on manual ways of working, which introduce an inherent risk of error. What’s more, as our business started to grow, finance processes threatened to become increasingly time-consuming and expensive. To keep costs down, we performed profitability calculations less frequently and at a higher level than we really wanted, giving us limited insight to support decision-making.
“When we recognized that sluggish finance processes looked set to jeopardize our expansion dreams, we set out to find a solution that could better support our booming business.”
Selecting a recipe for success
After evaluating offerings from a range of vendors, Scharff decided to deploy a set of leading SAP ERP applications.
“We have our sights set on global expansion, and we wanted a solution that would scale seamlessly as our business grows,” explains Wilmer Pineda. “We were confident that SAP would offer us rapid access to detailed, accurate finance information, while providing headroom to accommodate future growth.”
Implementing such a sophisticated solution at the heart of a major enterprise is complex work. For assistance during the deployment, Scharff called on an expert team from IBM Services.
“From day one of the tender, the IBM team listened carefully to our needs and desires, and developed a detailed understanding of our business,” recalls Wilmer Pineda. “Thanks to their diligent approach, the IBM team presented us with a thorough proposal that addressed everything we had set out to achieve.
“On top of that, IBM employs many experts on SAP solutions, finance processes and the logistics industry, and engages the most relevant people to work on each deployment. With IBM, we were confident that our business was in safe hands.”
A ten-strong team from IBM Services provided consulting services to support the implementation. Scharff temporarily shifted leaders of ten operational functions from their day-to-day roles, combining them in a team fully focused on the SAP deployment. This team designed slick new finance processes to boost operational efficiency.
“Any major business transformation carries a risk of delays and overspend, so when the IBM team told us that the SAP implementation was going to take seven months, we thought it would last longer,” adds Wilmer Pineda. “But from the outset to the final go-live, IBM expertly managed the process, coordinating the relevant teams and activities. With IBM’s help, we completed the entire migration perfectly on schedule and within the given budget. As a result, the SAP solution was ready for us to start using in the new fiscal year.
“We’re so happy that we decided to work with IBM. Their approach was so methodical and professional, and there is a great deal of mutual trust between Scharff and IBM. It’s now been five months since the go-live for the SAP applications, and everything is working exceptionally well.”
The SAP ERP environment features finance modules for the general ledger, accounts payable, accounts receivable and treasury, plus materials management modules for purchasing, inventory management, and invoice verification.
Unearthing rich insight
With the SAP applications in place, senior managers have instant access to accurate, detailed data on financial performance to support decision-making.
“In the past, our accountant compiled spreadsheets on financial performance to update the executive board at their regular meetings,” continues Wilmer Pineda. “Now, because the solution has a user-friendly interface, senior executives view the figures directly in SAP.
“We can see profitability by country, division, product and service. With that insight, we can make smarter decisions about which markets we want to expand into, which clients we want to work with, and where to invest—ultimately transforming Scharff into a smarter, more profitable business.
“We’re also much more agile in our response to new developments. For example, previously it was prohibitively expensive to look at financial results in detail more than once a month. Now, with instant data access, we can keep our finger on the pulse of our business and stay up-to-date on fresh developments.”
To help executives grasp the meaning behind the figures even more quickly, Scharff plans to implement an analytics solution on top of SAP ERP, enabling decision-makers to view financial data in eye-catching charts and graphs.
Wilmer Pineda adds: “Major conglomerates want to work with suppliers who speak their language. By collaborating with world-leading companies like IBM and SAP, we are taking a step ahead of other logistics companies in Peru, and joining the bigger international players. In doing so, we can position ourselves in different category and sharpen our ability to win deals from major enterprise clients, which can bring in enormous business volumes.”
Working with IBM Services, Scharff has automated many processes that were previously performed manually.
“In the past, to perform bank reconciliations, we had to take figures from the company’s records—such as the general ledger account and balance sheet—and verify each one individually,” recalls Wilmer Pineda. “Since Scharff’s Peruvian arm alone held 84 bank accounts with 12 different banks, the process involved huge quantities of documentation and weeks of spreadsheet work.
“Now, we’ve consolidated to just 36 accounts with four banks. Since the banks transfer the information we need directly into SAP, bank reconciliations can now be performed automatically in just a few minutes.
“We can tell a similar story with accounts receivable calculations, which we have also accelerated from weeks to hours. What’s more, compiling results at the end of each accounting period formerly required 20 days of manual work—now, SAP crunches the numbers in seconds.”
Wilmer Pineda continues: “As a result of these efficiencies, our finance team can devote more time to value-add tasks and fine-tuning our commercial strategy. By shifting from slow manual working to slick digitized processes, we’re transforming the way we operate and becoming smarter, leaner and more agile. In terms of our ability to keep costs down and win new business, it’s a real game-changer. We’re excited to see where this journey will take us.”
With heightened operational efficiency, Scharff is in a better position to capitalize on new growth opportunities.
Wilmer Pineda concludes: “Our work with IBM and SAP has ushered in a new era of success for our business. As Peru and other nations embrace international trade, thanks to IBM and SAP, we’re better equipped than ever to serve them.”
About Grupo Scharff
One of Peru’s leading logistics specialists, Grupo Scharff offers end-to-end supply chain management. Headquartered in Callao near Lima, the company also operates in Bolivia and Ecuador. In total, Scharff Peru employs 569 people and generates annual revenues of approximately USD4.39 million. In addition, the company represents FedEx in Peru and Bolivia.
- GBS AD&I - EA - SAP
- GBS BCS - EA SAP : Core ERP Central Component - ECC
- GBS BCS EA - SAP
- IBM Global Business Services
- IBM-SAP Alliance