To protect profitability, cut waste, and improve efficiency, ABM Investama wanted to flex mining production in line with volatile energy prices—but slow analytics and reporting limited responsiveness.
To speed time-to-insight, ABM Investama moved to SAP S/4HANA on the AWS cloud, completed in just six months, enabled by IBM Rapid Move for SAP S/4HANA from IBM Services.
25% fastermigration to SAP S/4HANA on AWS cloud compared to traditional approaches
47% consolidationof SAP company codes achieved through selective data migration
90% fasterreporting helps ABM respond to market changes and protect its margins
Powering economic growth
Coal remains a key constituent of the global energy mix, accounting for almost 40 percent of the world’s electricity generation. Much of this demand is concentrated in China and Southeast Asia, home to ABM Investama in Indonesia. The company plays a vital role in the end-to-end energy value chain, from mining and processing to logistics and shipping.
With more than 15 integrated subsidiaries focused on mining, services and infrastructures, business process delays can have a significant impact on group-wide costs. Executives pay close attention to fluctuations in energy prices, and constantly monitor supply chain issues. For example, distribution disruption means the company may need to cut back production to avoid the costs of storing a large backlog of coal that cannot be shipped.
Like many leading energy companies, ABM Investama relied on SAP ERP applications to drive its business. To safeguard its margins, the company realized it needed to provide decision-makers with operational insights faster than the platform could deliver.
Ahmad Salman Rida, Head of Digital and Analytics at PT ABM Investama Tbk, takes up the story, “Our previous SAP platform was approaching end-of-life, and simply wasn’t able to generate reports at the speed the business now requires. To empower our leaders to make timely, better-informed decisions, we looked for a new approach. At the same time, we saw an opportunity to improve the overall performance and cost-efficiency of our SAP solution by rationalizing our SAP company codes. The aim was to leave behind data from defunct and divested subsidiaries, and consolidate the number of company codes in the SAP system by 47 percent.”
Targeting in-memory analytics
To augment its analytics capabilities, ABM Investama decided to make the transition to the next-generation SAP S/4HANA platform.
“SAP solutions have supported our business for many years, so we were more than confident that SAP S/4HANA could deliver on our operational requirements,” Ahmad Salman Rida recalls. “Although we initially considered upgrading our SAP ERP database to SAP HANA as an intermediate stage on the journey to SAP S/4HANA, we quickly determined that the advanced analytics capabilities of SAP S/4HANA made an immediate move to the platform the optimal choice.”
Racing against the clock
As it embarked on its digital transformation program, named “Project Phoenix”, ABM Investama set an aggressive deadline to complete the SAP system conversion, deployment, data migration, and go-live. To maximize the value of its investment, the aim was to move to the new platform by the beginning of the new tax year, ensuring all net-new transactions would be available for reporting immediately.
Ahmad Salman Rida continues, “Our research highlighted that leading-edge software developed by SNP Group could help us achieve our goal of a rapid SAP deployment. To help us to harness them effectively, we looked for an expert partner. We quickly found that IBM had an offering that combined the software from SNP Group with best-practice approaches, solutions, expertise and assets: IBM Rapid Move for SAP S/4HANA.”
Doni Syamsurianto, Chief Information Officer at PT ABM Investama Tbk, adds, “The approach leverages the power of software automation together with unparalleled visibility and analytics, allowing us to get the business benefits of SAP S/4HANA far faster than traditional methods would allow, and ensuring we don’t have to wait years to build up enough historical data for the analytics to work. This method thus delivers faster return on investment, increased business continuity, agility, a lower total cost of ownership, improved governance and compliance.”
Choosing a proven approach
Delivered by IBM Services, IBM Rapid Move for SAP S/4HANA is an alternative approach designed to provide a smarter and faster way to achieve digital transformation. Built on IBM’s decades of experience in large-scale SAP deployments, the offering provides the ability to cleanse, transform, merge and consolidate full or partial historic data. It also includes SNP CrystalBridge software from business transformation software company SNP Group, enabling enterprises to move to the latest in-memory platform without the need for multiple migrations and deployments.
“One aspect of the IBM Rapid Move for SAP S/4HANA offering that impressed us most was the ability to choose precisely which data we wanted to migrate,” adds Ahmad Salman Rida. “Our SAP ERP system contained data from all our original subsidiaries. If we used a traditional migration methodology, we would need to invest time and resources in bringing across data from all subsidiaries in the legacy system, even though 47 percent of those SAP company codes are inactive.”
He continues, “Migrating data selectively promised to remove the obsolete data, reducing our storage requirements in the target environment and minimizing our costs. The solution would also enable us to cleanse our data before we moved it to the new SAP S/4HANA platform—for example, by removing duplicated, incomplete or inaccurate data on our suppliers and trading partners.”
Planning to succeed
As a first step, the IBM Services team deployed the IBM HANA Impact Assessment, SAP S/4HANA Conversion Best Practice and SAP S/4HANA Conversion Lessons Learned to help gather key insights and prepare for the transformation journey ahead.
ABM Investama chose to deploy the SAP solutions in the AWS cloud—delivering high levels of security, agility and flexibility for its mission-critical systems. AWS has innovated with SAP technology since 2008, and offers a network architected to protect sensitive information, identities, applications, and devices—enabling ABM Investama to meet its rigorous security, governance and compliance requirements.
By opting for AWS cloud technology, the company can use On-Demand Capacity Reservation to elastically flex its compute resources to accommodate peak business periods. The AWS cloud also enhances the company’s approach to data backup and disaster recovery, enabling it to move from one backup every 24 hours to six daily snapshot copies of its production data—reducing its recovery point objective significantly and enabling faster recovery in the event of a disaster scenario.
Ahmad Salman Rida comments, “The IBM HANA Impact Assessment was extremely helpful when it came to sizing our cloud infrastructure. Before we even started planning our migration, we could see how much data we needed to move, how much of that data was custom code, and the likely work required. IBM is also a Premier Partner in the AWS Partner Network, which gave us the confidence that IBM had the resources, experience, and methodologies to accelerate our move to cloud.”
Going live on time
Working with IBM Services, ABM Investama selectively migrated and transformed data from the legacy SAP ERP environment to the new SAP S/4HANA platform—consolidating its SAP company codes by 47 percent.
Zairina, Project Manager for S/4HANA Migration at PT ABM Investama Tbk, says, “We were blown away by how simple it was to move our data using SNP CrystalBridge with IBM Rapid Move for SAP S/4HANA. We simply chose which SAP objects we wanted to keep in the new platform from a list, and the software automatically handled the rest. By sifting out the obsolete data, we shrunk the size of our database from over 2 TB to just 300 GB, a reduction of 85 percent.”
After a series of trial runs, IBM Services helped ABM Investama to reduce the time required to migrate its data to the AWS cloud from 12 hours to just three hours. Following a successful big-bang cutover, the company went live with its new SAP S/4HANA platform on time and within budget.
“Not one of the other vendors was able to promise a project timeline of less than eight months. IBM Rapid Move for SAP S/4HANA got the job done inside just six months,” adds Ahmad Salman Rida. “IBM Services went out of the way to ensure the project went smoothly, and the team played a crucial role in completing our go-live before the start of the new financial year.”
Enabling advanced data analytics
By embracing the next-generation analytics capabilities of SAP S/4HANA, ABM Investama can provide decision-makers with operational insights faster than ever. The company has already accelerated the extraction of SAP Business Warehouse data for a key asset management report from seven hours to just 40 minutes, and cut the time required to create a budget-checking report for one of its largest subsidiaries by 90 percent.
ABM Investama is now harnessing the SAP Fiori user experience to develop mobile dashboards for managers working across Indonesia.
“Many of our decision-makers spend most of their time working remotely at our mining sites, which meant there was historically a significant lead time between capturing information and entering it into our SAP business systems,” explains Ahmad Salman Rida.
“Today, our managers can access SAP S/4HANA on their mobile devices to perform tasks such as approving purchase orders and maintenance requests for mining machinery. As well as helping us to keep our mines running smoothly, we now have clearer and more accurate visibility of operations across the group, which makes it easier for us to identify potential supply-chain issues and scale our production up or down accordingly.”
Enhancing key processes
Decision-makers ranging from managers to senior leaders across all ABM Investama subsidiaries now have access to SAP S/4HANA reporting dashboards.
Zairina elaborates, “In the past, it could take many weeks to report on our supplier relationships at the group level. Thanks to SAP S/4HANA, we can now see fine-grained data on our spending with suppliers in real time. We are using this insight to enable strategic sourcing, which we predict will deliver annual cost-savings of up to 15 percent.”
Although its journey with SAP S/4HANA is just beginning, ABM Investama is already targeting significant efficiency improvements in key process areas. For example, the company expects to cut its month-end closing process from ten days to just five days, freeing employees to spend more time on value-added analysis.
Planning for the future
ABM Investama is also exploring the possibility of augmenting its SAP S/4HANA platform. For example, the company is planning to move from its current SAP human resources application to SAP SuccessFactors within the next year. The aim is to enhance its approach to human capital management by adding easy-to-use self-service capabilities, helping ABM Investama move closer to its goal of becoming Indonesia’s employer of choice—particularly among the increasingly important millennial demographic.
In parallel, the organization is considering ways to harness Internet of Things (IoT) technologies to promote better health and safety among its workers. For example, by monitoring employees’ heart rates and body temperatures using smart watches, ABM Investama can monitor fatigue levels across its workforce and implement polices to reduce the risk of fatigue-related accidents. In-cab vehicle cameras could even be used to track drivers’ eye movements, and automatically apply the brakes if a worker loses concentration.
“The innovation on our roadmap would simply not be possible without a solid foundation for analytics, and thanks to the selective data migration and data cleansing we performed for SAP S/4HANA, that is exactly what we have achieved,” concludes Ahmad Salman Rida.
“We see that our ability to leverage our data will become increasingly important to maintain strong profitability in the years to come. By working with IBM Services to move rapidly to SAP S/4HANA in the cloud, we have gained the analytics capabilities we need to remain agile and competitive in a volatile marketplace.”
About PT ABM Investama Tbk
ABM Investama pursues strategic investments in mining resources, mining services, and mining infrastructure. The company strives to integrate and create synergy among its business units to support the supply-chain activities of its mining businesses. ABM Investama continues to expand its production platform and improve the profitability of its business units, while developing a comprehensive organization that will be capable of strong synergy and integration with all business units.
Take the next step
To learn more about the IBM SAP Alliance, please contact your IBM representative or IBM Business Partner, or visit: ibm.com/sap
To learn more about SAP S/4HANA, please talk to one of our IBM SAP experts or visit: ibm.biz/gbssap4hanana-scheduler or ibm.com/services/sap/s4hana
To learn more about the IBM consulting services for AWS, please contact your IBM representative or IBM Business Partner, or visit: ibm.com/services/cloud/aws
Headquartered in Heidelberg, Germany, SNP Group helps organizations transform their business models and embrace new technologies. Employing over 1,350 people worldwide, SNP Group’s software and services make it easier for businesses to modernize and enhance their global business applications: enabling data-driven decision-making. To learn more about solutions from SNP Group, please visit: snpgroup.com