Three merge into one – a new operating company is born

Feature Article | February 18, 2003 by admin

Western consumers are more likely to expect to see Japanese products on the shelves of electronic and IT stores; Japanese agricultural products are less well known. However, agriculture is also big business in the land of the rising sun, and it needs crop protectors and seeds – products that form the core global business for Syngenta, for example, a company with its headquarters in Basel, Switzerland. The company was formed at the beginning of 2001 as a joint venture between the crop protection divisions of Novartis and Astra Zeneca. Mid 2001, Syngenta took over the Japanese Tomono Agrica, and together with the Japanese business divisions of Novartis and Astra Zeneca, formed Syngenta Japan. The merger required a fundamental strategic reorientation within the company. The aim was to create a business model to deliver crop solutions tailored to the specific requirements of the end users such as farmers and other growers.

Reorientation and “business as usual” at the same time

The challenge for Syngenta Japan was therefore to develop a new business strategy and to complete the fusion of three companies with different business practices. At the same time, “business as usual” was to be ensured for the customers during the transformation process. The redesign of business processes was to be based on the introduction of a new information system, which was to support both Syngenta’s operational business and the processes within the company.
To support planning and implementation, Syngenta turned to The Information Management Group (IMG), a consulting partner that had proven itself in previous engagement with Novartis. With its multinational presence and deep industry knowledge, IMG was quickly able to marshal the necessary consulting resources from both Japan and Europe. Syngenta chose SAP R/3 as the system solution for Enterprise Resource Planning (ERP) .

New business processes introduced

In March 2001, Syngenta Japan senior management established the overall direction, objectives and priorities for the project. First, processes within the supply chain, financial accounting and controlling were defined. Second, the company laid the groundwork for the reorganization of sales and sales planning. Next, the multinational project team kicked off the project with the Business Process Reengineering (BPR) phase. With systematic and transparent project management, Syngenta carried out the redesign of the processes, as well as the detailed documentation of the finance, sales and supply chain functions, including the design of the key performance indicators (KPIs). The BPR phase was completed by the end of July 2001.

Multicultural success for SAP R/3

The next step on the agenda was system implementation. In this stage, it was necessary to keep within the tight schedule and budget. The company was also faced with another, very specific challenge, namely the coordination of a multicultural, international team. SAP implementation had three major stages. First, Syngenta implemented an interim solution using Astra Zeneca’s existing SAP R/3 system (version 3.0). By doing so, the company hoped to facilitate the merger of Syngenta Japan, which was to take place in July 2001. The setup of the interim solution required all business data to be transferred from Novartis to the interim system. At the same time, Syngenta implemented SAP R/3 version 4.6 based on the redesigned business processes. This task was completed by the second quarter of 2002. The third stage of the project involved the integration of end users and the definition of service level agreements (SLA) with the outsourcing partner. Server and application support were both outsourced, for example, because Syngenta did not have the necessary resources. The outsourcing partner was the local company TIS.
IMG tackled country-specific features during implementation with the help of Japanese consultants, who also greatly facilitated communication throughout the project. As the Japanese language was a requirement for the system front-end, it was decided to carry out the system customization first in English, and then to translate it into Japanese. User handbooks were also delivered in both English and Japanese.
One of the main issues during the realization phase was the cleanup of master data before the data migration. The work estimation for this effort was relatively high, and it was clear that only end users could successfully deliver this part. Since the end users were totally absorbed by their daily business, the work had to be accomplished during spare time and on the weekends. Top management was very supportive in convincing the employees of the added value of this effort for the future success of both the system and the business. As a result, data cleanup was completed on time, and data migration was successful.

“Golden Week” for system introduction

Syngenta chose May 1, 2002 as the date for going live, which falls within the Japanese “Golden Week”. This week is a collection of several national holidays within seven days and is a major vacation period for the Japanese. As a result, activity is relatively low. However, on the first day of operation, the software solution had to process 500 orders – a true test of the robustness of the system. All orders were successfully billed and delivered the next day. The new SAP R/3 solution, which replaced the previous systems at Novartis and Astra Zeneca, comprises order entry, delivery and billing, materials management, purchasing, the awarding of orders to subcontractors, requirements planning, financial accounting, controlling, and reporting.

High degree of professionalism

The project made an important contribution to the formation of Syngenta Japan, and the company was extremely satisfied with the progress and results: “The way IMG managed this project within a demanding multicultural merger environment earned our confidence in IMG’s ability to professionally handle these types of situations,” said Christophe Biollaz, CFO, Syngenta Japan. “The team communicated very efficiently and managed to navigate very successfully through the Syngenta organization in Tokyo, the Asia-Pacific organization in Hong Kong, and the headquarters in Basel, Switzerland. The result-oriented approach of the project team and its untiring commitment to ‘make it happen’ made the difference in the end.” Today, the new SAP solution is already helping Syngenta Japan to establish an excellent competitive position in the hard-fought agribusiness market. The company is therefore also ideally equipped to meet the challenges of the future.

Ibrahim Elmallawany

Ibrahim Elmallawany

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