Following rapid growth and several acquisitions, Hayleys found that having disparate legacy environments made it difficult to see the big picture and to proactively drive business growth strategies.
To enable digital transformation, Hayleys engaged IBM® Services to implement SAP S/4HANA® in four sectors, deploying IBM Power Systems servers and IBM Storwize storage to support the SAP® solutions.
2 dayssaved in monthly closing processes
60% time savingon financial reporting in the Fentons sector
Up to 25%potential savings from consolidating back-office operations
Business Challenge Story
Hayleys PLC is Sri Lanka’s most diversified conglomerate employing 32,000 people with business verticals that span across 16 sectors including the country’s agriculture, manufacturing and services sectors. Furthermore Hayleys is Sri Lanka’s 1st listed company to surpass an annual revenue of USD 1 billion. To steer profitability across such a diverse business with multiple operating units, Hayleys requires deep insight into business, financial integrity, operational and financial performance at the subsidiary, sector and group level.
Historically, Hayleys relied on a disparate set of enterprise applications. To examine business and operational performance within a given sector, between subsidiaries, or across the entire group, the finance team compiled and collated data manually.
Aiming to drive business growth and harmonize reporting, in 2011 Hayleys made a group-level strategic decision to implement SAP ERP solutions in several subsidiaries. Sarath Ganegoda, Group Executive Director at Hayleys, elaborates: “We chose SAP as our strategic platform because it provides excellent support across our wide range of industry verticals.”
At the same time, Hayleys continued to acquire companies to broaden its portfolio and strengthen its market position. In 2016 Hayleys acquired an infrastructure services provider called Fentons and in 2017 Hayleys acquired the leading consumer durables retailer Singer.
To ease the onboarding process, Hayleys looked to replace Fentons’ legacy ERP platform with SAP S/4HANA Enterprise Management. Hayleys Aventura (an industrial solution business), Hayleys Dipped Products (a global rubber glove manufacturer and exporter) and Hayleys Agriculture expressed their interest in the planned implementation. As a result, the four subsidiaries decided to join forces for the SAP S/4HANA deployment.
Choosing the right partner
Together, the group of subsidiaries evaluated proposals from SAP implementation partners, looking for industry experience, geographical coverage and a competitive commercial proposal. The team decided to engage IBM Services.
Sarath Ganegoda explains the reasons for choosing IBM: “Rather than treat each deployment separately, IBM proposed that we implement SAP S/4HANA across the four businesses in a single project using a single blueprint. That approach resonated with management, because it would make it much easier for us to roll out SAP S/4HANA across additional sectors in the future, and would minimize our overall investment in ERP.
“The IBM consultants demonstrated impressive credentials, including a strong track record of SAP implementations in numerous industries and lines of business, so we were confident that the SAP S/4HANA deployment would be a success. The IBM proposal also offered good value for money, and IBM is a strong brand worldwide. Furthermore, IBM offers well-established local support in Sri Lanka.”
The IBM Services team scoped out the end-to-end functionality required across the four sectors within SAP S/4HANA Enterprise Management. To deliver the full breadth of functionality, IBM deployed almost all available modules within SAP S/4HANA Enterprise Management, including finance and controlling, sales and distribution, material management, production planning, plant maintenance, project systems and customer service.
During the SAP S/4HANA deployment, the IBM team harnessed an agile project management methodology – helping to keep the large-scale project running on schedule. To enable the four businesses to hit the ground running with SAP S/4HANA, the IBM Services team helped Hayleys personnel to develop several critical enhancements and reports, and trained them to design and develop independently.
Sarath Ganegoda notes: “The expertise, guidance and support from the IBM team gave us the confidence to re-think business processes across the four sectors, bring in industry-leading practices and change them for the better. IBM Services played a key role in the transformation of our business with SAP S/4HANA.
“IBM also did an excellent job training technical, functional and support staff from Hayleys, so that we can make the most of the new solution.”
The roll-out is now complete, and IBM continues to provide application management services (AMS) to Hayleys. The IBM implementation consultants remained on-site during the first two months of the AMS contract, helping Hayleys to manage support tickets and ensure the businesses reap maximum benefit from the new SAP S/4HANA solution.
Sarath Ganegoda remarks: “We are very happy with the application management services we receive from IBM, and there is a good relationship between the Hayleys team and the IBM consultants. The implementation schedule was already tight, and for business reasons we needed to bring forward the Dipped Products deployment. IBM stepped up to the challenge and we successfully went live across all four sectors, including 40 legal entities, within just six months, ahead of the original schedule for Dipped Products.
“The deployment went remarkably smoothly. We have experienced minimal post-implementation issues, and any problems were resolved quickly. The post go-live support has been excellent.”
Hayleys was particularly impressed with the dedication demonstrated by the IBM team, and created a special reward for the excellence of the in-house support team, and for functional and technical support.
Shermalie Siyasena, Project Manager, Fentons, adds: “Working with IBM has been very positive, and we appreciated the ‘can-do’ attitude of the IBM team. The consultants from IBM Services were reliable and knowledgeable, and they worked well alongside our in-house personnel.”
Maximizing cost efficiency and ROI
To support the SAP S/4HANA solutions, Hayleys chose a Tailored Data Center Integration (TDI) of IBM Power Systems servers. Hayleys relies on six IBM Power Systems S824 servers, virtualized using IBM PowerVM® and running the SUSE Linux Enterprise Server for SAP Applications operating system. SAP data is stored on two IBM Storwize V5020 storage arrays. For support during the hardware deployment, Hayleys relied on excellent assistance from IBM Systems Lab Services.
Shuhail Mohamed, Head of Group IT at Hayleys, says: “We have run our business on IBM infrastructure for around 35 years, and IBM never disappoints. Working with IBM has always been an excellent experience. We chose IBM Power Systems to support SAP S/4HANA because we were happy with the platform’s proven performance and reliability. Furthermore, IBM Power Systems offered the TDI facility which other platforms couldn’t provide, and we believe IBM POWER8 processors are superior to Intel equivalents.
“IBM Power Systems enables us to follow a scale-up approach as we bring more Hayleys entities onto SAP S/4HANA in future. We can expand our environment on-the-fly, without disruption to business users. Already, we have seen that our IBM Power Systems server environment enables fast provisioning of new systems and rapid application response times, making us more flexible and agile as a business. In addition, because IBM Power Systems enables us to run on fewer physical servers than other platforms, we reduce the burden of system administration and save money.
“We chose IBM Storwize because we had used IBM storage previously and knew that it was reliable. Furthermore, we were keen to obtain the advantages of buying services, servers and storage from a single vendor. If we have any problems there is no finger-pointing; we just call IBM and they resolve the issue.”
Unearthing rich insight at group level
With SAP S/4HANA in place across Fentons, Aventura, Dipped Products and Agriculture sectors, Hayleys gains a comprehensive view of its business performance in real-time. The SAP S/4HANA solution enables the businesses to align more closely with Hayleys PLC, for example by using standardized processes across all the functions that are common to all the sectors. Critically, with the SAP S/4HANA deployment Hayleys has implemented robust business controls, leading to greater integrity and accuracy of financial data.
Across all four sectors, business management and operational reviews are now much easier than before. Sarath Ganegoda explains: “SAP S/4HANA enables us to automate large parts of the month-end process. For example, the profit and loss of each project are now calculated and posted automatically, saving time for the finance team. We can now complete monthly closing in three business days rather than five.
“Furthermore, having SAP S/4HANA as a common platform will enable us to consolidate back-office operations, cutting back-office costs by up to 25 percent in some sectors. We also hope to reduce turnaround times for manufacturing and shipping to provide a better customer experience. Furthermore, we aim to reduce inventory levels by performing more in-depth analysis of sales and future demand.
“The SAP S/4HANA deployment by IBM Services has helped us to digitize a significant proportion of our operations, as part of a broader digital transformation across our business.”
Benefits within the sectors
Moving to SAP S/4HANA has eased the onboarding process for Fentons, and made it easier for Fentons to provide financial information requested by the Hayleys Group. In addition, Fentons now has a much clearer view of progress and profitability across its ongoing projects.
Sampath Sri Jayawickrama, Chief Financial Officer for Fentons, elaborates: “SAP S/4HANA has allowed us to introduce automated reporting – saving time for finance personnel and reducing our monthly closing by 60 percent.
“Furthermore, we have improved project management – for example, assigning employees with particular skills to appropriate projects. In particular, engineers have deeper insight into project finances, so they can spot potential problems and take corrective action early. That kind of insight fuels better business results.”
In addition, Aventura benefits from streamlined controls and manufacturing optimization, plus clearer visibility of product costing and production variances. Here also, engineers have a deeper understanding of project finance, and Aventura has been able to implement robust controls around budgeting, planning, execution and closing especially in the project systems.
At Hayleys Aventura, Chandana Wijesundara, Director of Finance, and Dinesh Nandajeewa, Project Manager, agree: “This implementation acts as a foundation for our digital transformation, and for streamlining processes. Working with IBM we have integrated our processes with post-sales service, sales analysis, which provides better visibility and enable improved business forecasting.”
In the Agriculture and Dipped Products sectors, Hayleys has introduced automation into its manufacturing processes. Planning, costings, work-in-progress analysis and variance analysis are now all performed directly in SAP S/4HANA. This approach saves time by avoiding manual work, and reduces the risk of human error.
Lushan Abesekara, Director of Finance, and Sujeewa Gamage, Project Manager, of Hayleys Agriculture, add, “Today, we can monitor costs incurred and variances in the production process, enabling us to calculate total production costs more quickly, easily and accurately. We also benefit from greater visibility into and control over invoicing processes.”
Ramesh Nanayakkara, Director of Finance, and Asanga Jayanada, Project Manager, of Dipped Products explain: “With the SAP S/4HANA solution, we have considerably improved the accuracy of our demand planning, enabling us to offer customers more precise delivery windows and a better overall service.”
To further sharpen its analytics capabilities, Hayleys plans to introduce SAP Business Intelligence and SAP BusinessObjects™. To make insights readily available for senior managers and board members, the company aims to provide dashboards in SAP Fiori®.
Hayleys is evaluating SAP Ariba® to support centralized procurement – further streamlining business activities. Additionally, Hayleys is considering replacing its local HR solutions with SAP SuccessFactors modules for performance and goals, employee development and talent management.
The Aventura and Agriculture sectors plan to integrate the SAP S/4HANA solution with their existing customer relationship management (CRM) system, enabling easier, more efficient tracking of sales orders and related customer service queries.
Hayleys PLC is Sri Lanka’s most diversified conglomerate, employing 32,000 people with business verticals that span 16 sectors including the country’s agriculture, manufacturing and services industries. Furthermore, Hayleys is Sri Lanka’s 1st listed company to surpass an annual revenue of USD 1 billion. Hayleys has consistently been ranked in the Lanka Monthly Digest (LMD) list of “Most Respected Entities” since the inception of this rating system, securing a spot within the top 10 every time.
Take the Next Step
To learn more about running SAP HANA on Power Systems, please contact your IBM representative or IBM Business Partner, or visit the following website: ibm.com/power/saphana