The PACE (Process and Application Consolidation Enterprise Systems BASF Group) project poses a significant technological challenge to the BASF Group as it is no straightforward matter redesigning an SAP landscape that has grown up organically in a globally active company. “The project as a whole is anticipated to take around three years and consists of 17 sub-projects,” reports Ekkehard Matke, who is responsible for the technically-oriented IT projects in the IT Governance division of BASF.
The catalog of tasks is long. First it is crucial to consolidate the business applications in logistics, accounting, and plant maintenance at the Ludwigshafen site on a single system platform. Further, the various SAP solutions all need to be updated to the standardized SAP R/3 Enterprise version, a fact that requires new functionalities, for example for goods movements and order requests. As well as this, all applications are being switched to the Unicode standard. The BASF IT Services subsidiary is supervising the staggered implementation and ensuring that live operation is not disrupted.
Step-by-step to the goal
BASF IT Services started by creating a common platform for accounting and plant maintenance for the facility in Ludwigshafen by the end of 2005. This affected around 10,000 users. At the same time, the service provider began updating over 4,000 existing tailor-made system customizations – for example for packaging goods – to the current SAP standard. The live SAP solutions of the entire BASF Group were switched over to the Unicode standard by April 2006 – a key requirement for introducing uniform business processes to a globally active company.
The next milestone at the Ludwigshafen site was reached in mid-October 2006, when the SAP applications already integrated for the commercial department and plant maintenance were migrated to the existing logistics system and physically merged on a common platform under the name Cobalt (Consolidated BASF Accounting, Logistics and Technic System).
All the workstations were switched over to Cobalt over two consecutive weekends. This ensured that BASF employees were able to work with their solutions as usual on the next working day. Previously, 200 test users had checked whether everything was still running smoothly after the consolidation and that data could be exchanged between the various applications without glitches. After over 2,000 tests had been processed without difficulties, the project management gave the green light.
After this everything ran like clockwork – with users being enabled and disabled and systems being booted and shut down, all without a hitch. “However, the fact that the systems needed to be constantly available posed a considerable logistical challenge for us,” explains project engineer Dr. Peter Adamietz from BASF IT Services. Unlike changeovers performed during several weeks’ break in operation, this was very much the equivalent of “open-heart surgery”. Between Friday evening and Sunday evening, over 100 employees of BASF IT Services were busy switching over the SAP solutions. A further 250 BASF employees had the task of approving the applications once the changeovers had been made.
In the course of this technical migration, neither processes nor functions were changed. “After the merger, the three systems are so to speak in the same house under a single roof with the same foundation, but they are still divided into different apartments via partition walls,” says Adamietz.
Breaks in media are a thing of the past
The walls should come down over the course of the coming months when the various work processes and clients are merged into a single system. In January 2008 there will only be one ERP system at the BASF Ludwigshafen site – the world’s largest continuous chemical complex, covering a total of ten square kilometers.
This consolidation will not only reduce the annual running costs by tens of millions of Euros, it also has a range of further advantages. “The far tighter process integration enables us to avoid breaks in media which were previously commonplace and thus increase productivity,” explains Adamietz. For example, data from the logistics application used to have to be re-entered in the accounting section. This extra step is now a thing of the past. At the same time, the greater flexibility offered by this solution when acquiring companies and the rapid integration of these acquisitions into the Group’s IT landscape were further arguments for the PACE project.
The standardization serves as a key tool in BASF’s IT Governance in improving system efficiency and increasing security. “The previous three systems had over 1,000 internal and external interfaces that all had to be maintained and protected,” explains Matke. In future it will be much easier to ensure protection from external hackers.
Large-scale project mastered at own initiative
When the system is finally commissioned in January 2008, just under 13,000 users will switch to the new integrated platform. “A project on this scale has not been undertaken anywhere else, and not even SAP has any experience of this type,” says Matke. IT Governance and the BASF IT Services subsidiary therefore implemented the project in conjunction with the software manufacturer as a strategic partner completely under their own steam. “We are very proud of that,” Adamietz stresses. The project has given rise to expertise in all areas that BASF IT Services can also use for projects outside the parent Group in future.
PACE again showed how important it is to integrate employees at an early stage. More than 300 employees took part in a competition to come up with the name Cobalt for the integrated platform. Regular meetings of the Cobalt community team, where logistics specialists, commercial staff, and technicians compare notes, are just as much a part of the change management process as workshops in which the potential of the integrated solution is presented in detail. Newsletters and a special zone dedicated to the project on the BASF intranet ensure a rapid flow of communication.
“In sum, the new system means a relatively large change for the employees,” Adamietz states. For this reason, he adds, it is a good thing that the project is taking place over a long period and is being completed in stages. “This enables those affected to grow into the new environment slowly.” The integration of previously separate processes at the chemicals group is not simply a question of IT. For instance, in the past logistics postings were checked and approved by the commercial staff. Now the corresponding data is processed automatically, with procedures that have grown up over a period of many years being put to the test. This requires rigorous coordination and additional staff training. However, the forecasts indicate that the project will have an altogether positive effect on productivity.