British American Tobacco cuts ERP systems from 62 to six

British American Tobacco has cut the number of local SAP enterprise resource systems it uses from 62 to six.

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British American Tobacco has cut the number of local SAP enterprise resource systems it uses from 62 to six.

The cigarette manufacturer said it wanted to simplify its setup, improve the flexibility of its IT, and enable major cost savings.

The company, which operates in 180 markets and has 54,000 employees, had ended up through its expansion with a range of separate resource planning systems that were not interlinked, and it had found it difficult to have a view of the whole group’s activities.

Phil Colman, head of IT at BAT, told delegates at the London conference of the SAP World Tour that consolidating the software into six larger systems had saved it large amounts of money.

“We used to spend £34 million on support and development costs,” he said. Across two years, BAT carved £26 million off these costs, equating to approximately £13 million each year.

It will also make more substantial savings in other areas of the business as a result, he said. “In 2005 to 2009 [the duration of the programme], we will have saved €700 million (£549 million) in supply chain costs.”

The simplification will make it easier for BAT set up finance shared services centres, he said, including one in western Europe.

Through the programme, he added, BAT was learning the importance of “vision, executive buy-in, alignment of global and regional governance, sustainable change management and rigorous quality assurance”.

BAT's other key IT systems include a VMware server management platform, Microsoft SQL Server for database management, and IBM Lotus Domino for email.

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