It All Comes Together

Miroslav Moc, managing director of Testo s.r.o. in the Czech Republic, receives an order. A grocery dealer orders 100 units of testo 926 to monitor meat temperatures in its subsidiaries’ freezers and document the results on site by printing the logs that the units produce. Just a day later, the order confirmation is at the central office, along with information on the expected delivery date. Moc tells his customer the good news: 100 units can be delivered immediately.
Today, employees at Testo s.r.o. process this sales order and all others with SAP Business One. The order is created and automatically transmitted to the central SAP ERP application at Testo headquarters in Lenzkirch, where it is immediately posted and where a delivery is triggered.

Delivery zimes shortened by one week

Because SAP Business One links the Czech subsidiary to company headquarters, Moc always knows the status of an order. He can now trace all processes at any time – from order to delivery. But the Czech subsidiary is not alone. Offices in Poland, Australia, and Hungary are also linked to the central office using the SAP application, which means that they can delivery orders more quickly. “Depending on the subsidiary, we have shortened delivery times by up to one week,” says Thomas Kötting, director of business applications at Testo AG. Order processes are also much more secure.
Here’s a comparison. Sales subsidiaries used to process orders with Microsoft Word and Microsoft Excel files. Orders were transmitted to the central office in Lenzkirch by fax or e-mail. Employees at headquarters checked the orders, entered them manually into the SAP application, and then confirmed them by fax or e-mail. The procedure involved several media breaks, which made it easy to transpose the numbers for an order quantity. The subsidiaries also worked with accounting solutions from local software suppliers. Although the solutions met the requirements of the subsidiaries, they did not meet those of headquarters. Monthly reporting to headquarters demanded a great deal of administrative effort and time – especially for smaller subsidiaries – because the data had to be reformatted according to the requirements of the central office.

Taking the pulse of the market

“Comprehensive processes based on IT are becoming more and more indispensable to our global company,” says Kötting. Testo has been a technology leader for all of its 50 years of existence because of its ability to innovate. For example, its success comes from introducing one of the first digital thermometers and several global innovations in measuring climate and exhaust gas. Today, the company has 27 subsidiaries, employs more than 1,350 people, and continually sees its sales grow by double digits. With ongoing investments in research and development, the company sets the standard for measurement devices. The company celebrated its 50th anniversary in 2007, and the 50 innovative products it markets this year continue to signal a good future.
Customers appreciate the development work at Testo, but they also demand more innovative products. “To meet new or changed customer requirements quickly and to continue to be successful, we’ve got to take the pulse of the market every day,” says Kötting. Since 2001, the office in Lenzkirch has trusted the advantages of an integrated SAP landscape: SAP ERP, SAP Customer Relationship Management (SAP CRM), and SAP NetWeaver Business Intelligence (SAP NetWeaver BI) as a decentralized management information system.

All subsidiaries on one platform

An important part of Testo’s business strategy is to consolidate the entire company’s IT landscape on SAP software and to standardize and harmonize business processes from the initial customer contact to reporting. Little by little, the company will merge the technology of the applications that the subsidiaries use by moving it to Lenzkirch, so that it can gradually implement the processes defined as standard at headquarters in all its subsidiaries – as far as is legally and technically possible. The larger subsidiaries – mostly in Europe – and the production facility in China are already integrated into the central office with SAP ERP.
For small sales units of up to 15 employees and simple corporate structures, SAP ERP was too complex. Implementation and training costs were also too high for small offices. “That’s why we decided on SAP Business One,” says Kötting. The advantages of SAP Business One included cost, coverage of all sales processes, simple integration with the central SAP ERP applications, and the ability to support global use. The product is geared to the midmarket and is available in 40 national versions that meet the language, legal, and accounting needs of each country.

Implementation with a proven partner

The company entrusted implementation to itelligence AG. The SAP services and channel partner has guided all SAP projects at Testo from the very beginning. The consultants from itelligence first implemented the standard software for sales processes at a Polish subsidiary in October 2005, followed by accounting in January 2006. In April, June, and August 2006, the subsidiaries in Australia, Hungary, and the Czech Republic were brought on board one by one. “In the meantime, we also went through an upgrade from SAP R/3 to SAP ERP and converted our SAP software to the Unicode standard,” says Kötting.

Connections over SAP NetWeaver XI
Connections over SAP NetWeaver XI

At each subsidiary, the installations so far have lasted a maximum of three to four weeks, including on-site employee training. Before the rollout, the company defined a template in SAP Business One. The template stores the company’s standard for sales, inventory, and financial accounting processes. To map the comprehensive offerings of products and their many variants in SAP ERP at Testo, itelligence used a supplemental solution, the technical variant generator from Straton IT Consulting AG, an SAP channel partner, to help capture all the variants of an item. SAP NetWeaver XI ensures a smooth flow of data between SAP ERP and SAP Business One.
Right now, a total of 42 employees work with SAP Business One in the subsidiaries. The most recent rollout was in Korea. Russia, India, Brazil, and Argentina will follow in 2009. When the project is complete, between 70 and 100 users will work with SAP Business One.

The same information, uniform sales pitches

Since the implementation of SAP Business One, the company has standardized all customer processes and business reporting except for sales processes. Today, subsidiaries send quotations in the same layout that the central office uses. But even more important, the data stored in SAP ERP means that since the implementation of SAP Business One, subsidiaries have exactly the same view of a customer. “That creates a uniform process flow for customers, from quotation to follow-up,” says Kötting.
For example, Testo qualifies and evaluates customers according to specific criteria, such as industry and contact person. That information determines if contact is initiated by sales staff, office personnel, or the call center. Kötting won’t reveal the exact characteristics of customer qualification. “That’s what makes us more successful that the competition,” he says.

Planning sales with greater precision and driving sales better

But it’s no secret that Testo credits it success to better sales and distribution planning for individual products. What were the sales of all cold-measurement devices last month in Australia? How was business with testo 926 last week in the Czech Republic, Poland, and Hungary for grocery stores and catering services? SAP NetWeaver BI delivers the reports that contain the answers.
The reports are based on the sales figures of products, product groups, and markets. Product groups and products change often, so even the smallest subsidiary must make continual adjustments. But for the smaller companies, the devil was in the details. They often carried a product in a business area that no longer existed at headquarters. According to Kötting, that created a “skewed view of sales numbers for a product group; reports were no longer exact.”
That’s impossible since the implementation of SAP Business One. “Today, we plan sales more exactly and control sales processes more precisely,” says Kötting. If the requirements at headquarters change, the subsidiaries adjust automatically. That always gives the sales director a consistent set of data, so he receives informative and reliable reports.

Dr. Andreas Schaffry
Dr. Andreas Schaffry