Plumbing and heating materials supplier Wolseley is ploughing ahead with a group-wide SAP enterprise resource planning implementation, following a successful pilot rollout in Austria.
Rod Angwin, chief information officer at the company, told Computerworld UK the rollout would help Wolseley’s ‘Business Change’ efficiency programme, which aims to reduce costs and improve processes after tough times in the housing market hit Wolseley's bottom line. Expenditure on the programme, which began last year, is up to £100 million per year and the project runs until 2011.
Wolseley at a glance
PCs run Microsoft Windows
SAP ERP system replacing legacy technology 2007-2011
SAP financial management
High Jump warehousing management
Oracle Peoplesoft HR software
Planning for the SAP project began two years ago, but the first rollout was in Austria last August. Inventory management and profit margins had already been strengthened in Austria as a result, the company said.
The next stage of the programme, taking place this year, is the SAP rollout in Wolseley’s US division. In 2009, Wolseley will roll out SAP in the UK, its home market. The project is set to be completed across the company’s 28 markets by 2011.
Wolseley’s growth through buying other companies meant it had acquired a complex array of legacy systems that needed to be rationalised, Angwin said.
“We’ve grown out of acquisitions, so there’s a need for a common platform,” he explained. “They are all good legacy systems with relevance in each market, but we had to look at new ways of doing things.”
The SAP platform would provide better customer intelligence and greater productivity, and assist the business in making changes across different national divisions, he said. “We strongly believe that with good people and information we will continue to make better decisions than the other guys.”
Wolseley is also implementing other systems across its business as the ERP platform is switched on. The company will move away from its legacy systems and standardise on High Jump warehousing management, SAP financial management, and Oracle Peoplesoft human resources software.
Tightening conditions in the housing markets meant Wolseley’s profits in the half year to 31 January 2008 freefell 58 percent to £146 million, intensifying the need for the Business Change programme, which is focusing on process efficiencies.
“The common platform is critical,” Angwin said. “Times are tough for our market and we need to have a leaner and fitter business.”
Angwin said the Austrian implementation had taught the business to better “prepare customers” for the change, especially considering Wolseley had not used SAP before. Each division would take time to show measurable benefits and face its own set of technological and process challenges, he also warned. But he said he was pleased that the Austrian stage had “helped the business understand the value” of the change.